By Spy Uganda
Uganda’s shilling, Kenya’s shilling, Ghana’s cedi and Zambia’s kwacha are expected to weaken against the dollar in the week to Thursday, while Tanzania’s and Nigeria’s currencies are forecast to hold steady, traders said.
Uganda
The Ugandan shilling is seen weakening as a pick-up in appetite for dollars from both merchandise importers and commercial banks exerts pressure on the local unit.
Commercial banks quoted the shilling at 3,730/3,740, compared to last Thursday’s close of 3,665/3,675.
“We’re seeing quite substantial (dollar) appetite from importers in various sectors,” said one trader at a commercial bank in the capital Kampala. The heightened demand was meeting with tight inflows.”
Kenya
Kenya’s shilling is expected to weaken further, hurt by increased demand for dollars from the energy and manufacturing sectors.
Commercial banks quoted the shilling at 126.15/35 per dollar, compared with last Thursday’s close of 125.70/90.
“We see the shilling remaining under a lot of pressure. There is a lot of demand coming from across all sectors, and mainly from the energy and manufacturing (sectors),” a trader at one commercial bank.
Nigeria
Nigeria’s naira is seen holding at current levels next week until the shortage of local notes is resolved, traders said.
The naira has been marginally firmer on the parallel market due to a shortage of banknotes as the central bank implemented its cashless policy before Saturday’s presidential vote, traders said.
The naira was quoted at 755 to the dollar on the parallel market on Thursday, compared with 756 at last Thursday’s close. It traded within a range of 460 to 462 on the official market .
“Resolving the cash shortage has become more significant for the naira outlook than the election result — with the rate likely to hold around current levels until naira supplies recover,” currency trading firm AZA Finance said in a note.
Ghana’s cedi is expected to remain under pressure this week if the central bank does not step up against increased corporate demand and reduced U.S. dollar supplies.
Refinitiv data showed the cedi trading at 12.6500 to the dollar on Thursday, up from 12.0000 at last Thursday’s close.
“Cedi lost further ground this week amid increased corporate demand and reduced USD supply. We expect the cedi to remain under pressure barring any strong intervention from the central bank,” said Chris Nettey, a trader at Stanbic Bank.
Absa Ghana said in a note that the USD/GHS bid offer spread narrowed on improved liquidity on Wednesday. But the central has provided minimal support to the spot market by selling roughly $1 million, it added.
Tanzania
Tanzania’s shilling is expected to hold steady next week with inflows from foreign direct investments offsetting demand of the U.S. dollar from most sectors.
Commercial banks quoted the shilling at an average of 2,336/2,346 on Thursday, compared to 2,332/2,342 recorded at last week’s close.
“Tanzania’s government this week gave the green light to construction of a $3.5bn oil pipeline transporting crude from Uganda to the port of Tanga for export in the face of opposition over its potential environmental impact,” AZA Finance said in a note.
“We expect the shilling to continue trading around current levels near term.”
Zambia
The kwacha is likely to remain under pressure against the dollar next week as demand for hard currency continues to exceed supply.
On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 19.8400 per dollar from a close of 19.6100 a week ago.
“The kwacha is projected to follow a downward trajectory in the short term due to lack of dollar inflows and rising demand for hard currency,” Access Bank said in a note.
