According to a report from Reuters, the Nigerian naira is expected to continue its upward trend against the US dollar in the coming week, with forecasts indicating stability for currencies in Kenya, Ghana, Uganda, and Zambia.
The naira's potential for further gains is attributed to robust forex inflows coupled with the Central Bank of Nigeria's dollar sales to bureau de changes (BDCs). This intervention has effectively narrowed the gap between the official exchange rates and those in the parallel market.
On Thursday, the naira was traded at 1,344 to the dollar in the official market, a decline from 1,357 just one week prior. Meanwhile, on the street market, the currency was exchanged at 1,385 against the dollar.
A trader noted, "We anticipate the naira will remain strong in the upcoming week, supported by enhanced forex inflows and dollar sales to BDCs which are further reducing the parallel market premium."
In contrast, Kenya's shilling is projected to maintain its established stable pattern, with banks quoting it at 128.80/129.10 to the dollar, compared to last week’s close of 128.90/129.20.
In Ghana, the local cedi is likely to remain stable amidst a slowdown in corporate dollar demand, currently trading at 10.95 versus the dollar, down from 10.99 a week ago.
Trader Bertrand Baazeng from Absa Bank Ghana remarked, "The currency is expected to remain range-bound next week, backed by improved liquidity in the interbank market and weaker corporate demand."
Ronald Mensah, a trader from Stanbic Bank Ghana, added that steady trading is likely to continue unless there are significant external disruptions.
Meanwhile, Uganda's shilling is set to stay around present levels, bolstered by dollar inflows from charity organizations and commodity exporters, with current trading figures at 3,575/3,585 to the dollar compared to the prior week's closing rate of 3,535/3,545.
Expectations point to a rise in dollar inflows as the month ends, mainly from NGOs and certain commodity exporters, according to another trader's comments.
Zambia's kwacha is also expected to hold steady due to improvements in economic conditions and positive investor sentiment, quoted at 19.08 per dollar, slightly up from last week's 19.04.
Ebury's senior market analyst, Roman Ziruk, expressed optimism for the kwacha's future performance in his report on its outlook for the year.
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