African Currency Watch: Kenyan and Nigerian Shillings Face Potential Dip, Ugandan and Zambian Currencies to Hold Steady, Ghana's Cedi May Rise

Nairobi, Kenya – Economic analysts are forecasting a mixed performance for several key African currencies in the upcoming week. The Kenyan Shilling and Nigerian Naira are expected to experience a slight depreciation against the US dollar, while the Ugandan Shilling and Zambian Kwacha are predicted to maintain their current levels. In contrast, Ghana's Cedi might continue its recent upward trajectory, according to traders and market observers.

In Kenya, the Shilling is facing downward pressure primarily due to increased demand for dollars from importers, particularly within the food processing sector and other key industries. On Thursday, commercial banks quoted the Shilling at 129.00/129.50 per dollar, a rate consistent with its closing position a week prior. “We could see a slight weakening of the shilling, but not in a major way,” commented one currency trader, suggesting a modest rather than a dramatic shift.

Similarly, Nigeria's Naira is also anticipated to slip. The primary driver for this potential weakening is robust importer demand for dollars, which appears to be outweighing the dollar sales interventions by the country's central bank.

Elsewhere on the continent, the outlook is more stable. Uganda's Shilling is largely expected to hold its ground. This stability is attributed to limited local demand for dollars, coupled with consistent inflows from the nation's exporters, which helps to balance the currency market.

Zambia's Kwacha is also projected to remain steady, buoyed by anticipated tax inflows that typically strengthen the local currency by increasing dollar supply in the market.

Meanwhile, Ghana's Cedi presents a more optimistic picture. Traders suggest it could extend its recent gains. This positive momentum is reportedly supported by strong foreign exchange (forex) inflows and a noticeable dip in corporate demand for dollars. Additionally, interventions by Ghana's central bank are seen as a factor bolstering the Cedi's performance.