US Dollar
October 19, 2023
Kenya’s shilling, Zambia’s kwacha, Nigeria’s naira and the Ugandan shilling are forecast to lose ground against the dollar in the next week to Thursday, traders said.
Commercial banks quoted the shilling at 149.80/150.00 per dollar, compared with last Thursday’s closing rate of 148.85/149.05. The shilling’s present level – first touched on Wednesday – is a record low, according to LSEG data.
“The shilling is weakening daily. I have seen manufacturing and energy (sectors) buy (dollars),” a trader at one commercial bank said.
ZAMBIA
The kwacha will likely continue trading on the back foot against the dollar next week as demand for petroleum products weighs on the local unit.
On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 21.79 per dollar from 21.73 a week ago.
“The FX demand pipeline continues to grow, with significant appetite from the energy sector as it stocks up petroleum products,” the local branch of South Africa’s First National Bank (FNB) said in a note.
NIGERIA
Nigeria’s naira could ease in the coming week on the official and parallel markets after the currency hit record lows amid a central bank pledge to boost dollar supply in the market, which is yet to materialise.
The currency hit a record low of 1,155 naira to the dollar on the parallel market on Thursday after it hit a new low of 999 naira on the official market .
“We are seeing wide swings on currency … (and) the central bank has been keeping mute (on intervention), which is causing the naira depreciate,” one trader said.
“We should see more depreciation on the official market next week.”
GHANA
Ghana’s cedi is expected to be relatively stable next week due to easing demand for dollars from local corporates and some central bank intervention, traders said.
“Pressure on the local unit has eased a tad in recent sessions. We expect the currency to hold fairly steady against the dollar in the coming week as corporate FX demand remains contained amidst increased support from the central bank,” Sedem Dornoo, Senior trader Absa Bank Ghana Limited, said.
“It’s been relatively quiet on the interbank market this week, and the central bank has been active in providing support. We expect a fairly stable cedi in the coming sessions,” one trader added.
UGANDA
The Ugandan shilling is seen weakening in the coming days as demand from importers looking to ship in goods for Christmas puts the local unit under pressure.
At 1112 GMT commercial banks quoted the shilling at 3,750/3,760, compared to last Thursday’s close of 3,745/3,755
“Around this time of the year activity on the demand side usually surges, I think this will trigger a bit of pressure on the local unit,” said an independent foreign exchange trader in the capital Kampala.
TANZANIA
Tanzania’s shilling is expected to hold steady next week with inflows from tourism and investments helping to cushion the demand of US dollar from importers.
Commercial banks quoted the shilling at 2,495/2,505 on Thursday, compared to 2,500/2,510 recorded last week’s close.
REUTERS
