Currencies across Zambia and Ghana face mounting downward pressure as commercial banks and traders react to shifting corporate foreign currency demand, regional economic factors, and upcoming political events, while central banks in Nigeria and Uganda navigate distinct liquidity pressures in official markets.
Zambian Kwacha Faces Caution Ahead of August Elections
Zambia’s currency is poised to weaken as market participants exercise caution ahead of the country’s presidential and parliamentary elections scheduled for August 13. Commercial banks quoted the kwacha at 18.95 per dollar, slipping from 18.54 a week prior.
The upcoming vote introduces heightened market uncertainty, driving up local demand for hard currency. This near-term political pressure contrasts with the structural tailwinds supporting the kwacha earlier in the year. Stronger performance periods have relied on elevated copper prices near record highs, alongside the dedollarisation directive introduced in December and ongoing restructuring of the national debt, as noted by financial services firm Ebury.
Ghanaian Cedi Confronts Corporate Dollar Demand and IMF Inflows
Ghana’s cedi continues to trade under pressure against the dollar, driven by sustained corporate foreign currency demand from the energy and commerce sectors alongside corporate obligations linked to dividend repatriation.
Data from LSEG placed the cedi at 11.66 to the dollar, compared with 11.60 the previous week. We expect the greenback to maintain its edge against the local unit in the week ahead,
one trader said, pointing to firm FX demand and noting that central bank supply moderated in July compared with June.
Unmet dollar demand from central bank auctions risks compounding this depreciation pressure in upcoming sessions. However, market participants anticipate that the disbursement of the final $371 million under the $3 billion Extended Credit Facility programme from the International Monetary Fund will provide essential near-term support to the cedi.
Ugandan Shilling Finds Relief in Month-End Commodity Inflows
Unlike its regional peers, Uganda’s shilling is expected to firm, supported by typical month-end hard currency inflows originating from commodity exporters and charitable organizations.
Commercial banks quoted the shilling at 3,745 to 3,755 against the dollar, improving from the previous week’s close of 3,755 to 3,765. So currently the momentum is on the firming side because of those inflows and also we’re seeing a slowdown in (dollar) demand from energy importers,
a trader at a leading commercial bank in Kampala reported.
Kenyan Shilling Stabilizes on Diaspora Support
Kenya’s shilling is projected to maintain general stability following short-term losses recorded earlier in the period. Commercial banks exchanged the currency at 129.15 to 129.30 per dollar, recovering from last week’s close of 129.40 to 129.60.
Traders indicated that while the shilling experienced downward movement late last week and into the early days of the current week, consistent month-end diaspora inflows successfully corrected the trajectory.
Nigerian Naira Range-Bound Following Central Bank Intervention
Nigeria’s naira remains range-bound on the official market, anchored by central bank dollar sales after experiencing minor softening. Official market quotes placed the naira at 1,373 per dollar, compared with 1,369 the previous week, while street trading hovered near 1,405 to the dollar.
Next week, I expect (FX) rates to hover around 1,370 and 1,378 levels,
a market trader said. Anything that triggers depreciation beyond 1,390, you would see the central bank increase participation to provide liquidity.
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