According to a report from Reuters, Nigeria’s currency, the naira, is anticipated to gain further strength against the dollar in the upcoming week. In contrast, the currencies of Kenya, Ghana, Uganda, and Zambia are expected to remain relatively stable, according to traders.
The naira’s recent appreciation is attributed to robust foreign exchange inflows and the central bank’s dollar sales to bureau de changes (BDCs), which have contributed to narrowing the gap between official and parallel market exchange rates.
On Thursday, the naira was quoted at 1,344 to the dollar in the official market, showing improvement from 1,357 the previous week. In street trading, the naira was valued at 1,385 to the dollar.
A trader expressed expectations for the naira to maintain its strength in the coming week, supported by increased foreign exchange inflows and continued dollar sales to BDCs, which aid in reducing the parallel market premium.
Meanwhile, Kenya’s shilling is projected to continue its stable trend. Commercial banks quoted the shilling at 128.80/129.10 against the U.S. dollar, compared to last Thursday’s close of 128.90/129.20.
In Ghana, the cedi is likely to remain largely unchanged due to a slowdown in corporate dollar demand. LSEG data indicated the cedi trading at 10.95 to the dollar, slightly improved from 10.99 a week ago.
Bertrand Baazeng, a trader with Absa Bank Ghana, noted that the currency is expected to remain range-bound in the coming week, supported by enhanced interbank liquidity and reduced corporate demand. Ronald Mensah, a trader at Stanbic Bank Ghana, concurred, stating that range-bound trading is likely to continue unless significant external shocks occur.
Similarly, Uganda’s shilling is anticipated to trade around its current levels, bolstered by dollar inflows from charities and commodity exporters. Commercial banks quoted the shilling at 3,575/3,585 to the dollar, in comparison to last Thursday’s close of 3,535/3,545.
A trader mentioned that an increase in dollar flows is typically observed as the month-end approaches, primarily from NGOs and certain commodity exporters.
Additionally, Zambia’s kwacha is expected to remain steady, supported by improving economic conditions and positive investor sentiment. Commercial banks quoted the currency of Africa’s second-largest copper producer at 19.08 per dollar on Thursday, up slightly from 19.04 a week ago.
Roman Ziruk, a senior market analyst at Ebury, expressed optimism regarding the kwacha’s outlook for the year in a report.
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