Zambian Kwacha to Gain, Ghana Cedi and Uganda Shilling to Slide, Kenyan Shilling Stable
By Aboki Forex —
LUSAKA, May 28 – Zambia’s kwacha is expected to strengthen against the dollar in the week to Thursday, while Ghana’s cedi and Uganda’s shilling are seen losing ground. Kenya’s shilling should remain broadly stable, traders said.
Zambia: Kwacha supported by copper and debt restructuring
The kwacha is likely to gain, backed by steady inflows from the mining sector. On Thursday, the kwacha traded at 18.69 per dollar, up from 19.01 a week ago. “Elevated copper prices, which remain near record highs, continue to provide strong support. The kwacha is also reaping the benefits of the dedollarisation directive introduced in December, as well as the restructuring of the national debt,” said Diego Barnuevo, an analyst at financial services firm Ebury.
Ghana: Cedi under pressure from corporate dollar demand
Ghana’s cedi is expected to extend its gradual depreciation due to robust corporate foreign-currency demand. LSEG data showed the cedi trading at 11.67 to the dollar, compared to 11.54 a week earlier. “Sustained corporate FX demand for imports and dividend repatriation is expected to keep the cedi under pressure,” said Andrews Akoto, head of trading at Absa Bank Ghana. Another trader said dollar demand remained elevated, outstripping supply on the interbank market, and that the current trend would continue in the near term.
Uganda: Shilling weakens ahead of budget
Uganda’s shilling is seen trading with a weakening tone, undercut by higher foreign-currency demand in the lead-up to the country’s budget on June 11. Commercial banks quoted the shilling at 3,770/3,780 to the dollar, compared to last Thursday’s close of 3,775/3,785. “Typically we tend to see strong appetite before the budget reading because there’s a bit of uncertainty about how potential new tax policies might impact the FX market, so banks, importers and others want to be on the safe side,” a trader said.
Kenya: Shilling forecast flat
Kenya’s shilling is forecast to be little changed. Commercial banks quoted the shilling at 129.25/65 per dollar compared with last Thursday’s close of 129.50/95.