Zambia, Ghana currencies set to weaken, naira to hold range, traders say

The Zambian kwacha and Ghanaian cedi are expected to come under pressure against the dollar next week, while Uganda's shilling is set to firm and Kenya's and Nigeria's currencies should stay broadly stable, traders said.

Zambia and Ghana face demand pressures

Zambia's kwacha will likely weaken as hard currency demand picks up and market players stay cautious ahead of the presidential and parliamentary elections on August 13. On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 18.95 per dollar, compared with 18.54 a week ago.

Ghana's cedi could edge lower on persistent corporate dollar demand from the energy and commerce sectors. LSEG data showed the cedi trading at 11.66 to the dollar on Thursday, against 11.60 a week earlier.

One trader said the greenback should keep its edge against the local unit in the week ahead. “FX demand has remained firm, driven by the energy and commerce sectors, as well as corporate demand linked to dividend repatriation. Central bank FX supply has moderated in July compared with June,” the trader said.

Another trader said unmet dollar demand from central bank auctions could add to cedi pressure in coming sessions. However, the same trader expected the final $371 million disbursement under the $3 billion Extended Credit Facility from the IMF to support the cedi in the near term.

Uganda shilling to firm, Kenya stable

Uganda's shilling is expected to firm, helped by month-end dollar inflows from commodity exporters and charities. Commercial banks quoted the shilling at 3,745/3,755, compared with last Thursday's close of 3,755/3,765.

A trader at a leading commercial bank in Kampala said month-end inflows from exporters and charities, together with slower demand from energy importers, should support the currency.

Kenya's shilling is expected to hold broadly stable after recent losses, supported by month-end diaspora inflows. Commercial banks traded the shilling at 129.15/30 per dollar, compared with 129.40/60 a week earlier.

Naira range-bound, central bank ready to intervene

Nigeria's naira is expected to remain range-bound, supported by central bank dollar sales after easing this week. The naira traded at 1,373 per dollar on the official market on Thursday, compared with 1,369 a week earlier, while the parallel market quoted around 1,405 per dollar.

A trader expects the currency to trade between 1,370 and 1,378 next week, adding that the central bank is likely to increase liquidity if the exchange rate weakens beyond 1,390.

For Nigerian businesses, the naira's stability hinges on continued central bank intervention. Any sustained fall past 1,390 could trigger fresh dollar demand and pressure the official rate, so traders are watching that level closely.