Ghana’s cedi is expected to remain under pressure against the U.S. dollar in the coming days as demand for foreign exchange continues to outstrip supply, while Zambia’s kwacha is likely to stay broadly stable, traders said on Thursday.
The latest market outlook points to a mixed picture across key African currencies, with Ghana and Uganda facing renewed pressure from dollar demand, while Zambia and Kenya are seen as relatively steadier in the near term.
In Ghana, traders said the cedi could weaken further next week as importers and businesses in major sectors continue to seek hard currency in a market where liquidity remains tight.
Demand for dollars is being driven mainly by firms in the energy, manufacturing and commerce sectors, which require foreign exchange for imports, payments and other international obligations.
Data from the London Stock Exchange Group showed the cedi trading at around 10.93 to the dollar on Thursday, compared with 10.90 a week earlier.
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Although the move was modest, traders said the trend points to continuing pressure on the local currency unless there is a stronger improvement in foreign exchange supply.
Market participants said the Bank of Ghana’s foreign exchange auction has helped to cushion some of the strain, but not enough to fully balance demand conditions in the interbank market.
That means the cedi remains vulnerable to further slippage if liquidity does not improve meaningfully in the short term.
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The currency has been one of the most closely watched in the region, with businesses and investors monitoring whether recent policy support and external inflows can provide enough stability to offset sustained demand for dollars.
In Zambia, however, the outlook appears more supportive.
The kwacha is expected to hold relatively steady in the near term, helped by stronger market liquidity and increased hard currency sales ahead of end-of-month obligations.
Commercial banks quoted the Zambian currency at around 19.02 per dollar on Thursday, compared with 19.75 a week earlier, indicating a notable strengthening over the period.
Analysts linked the improved performance to anticipated foreign exchange inflows ahead of a government bond auction, which has helped improve liquidity conditions in the market.
That suggests the kwacha could remain supported in the short term, particularly if expected inflows materialise and demand conditions remain manageable.
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In Uganda, traders said the shilling is likely to trade with a weakening bias in the coming days, mainly because of the usual end-of-month demand for dollars from importers.
At around 0823 GMT, commercial banks quoted the Ugandan currency at 3,712/3,722 per dollar, compared with 3,775/3,785 a week earlier.
Despite the apparent improvement from last week’s levels, traders said pressure is expected to build as importers in sectors such as energy and manufacturing seek hard currency to meet commercial obligations.
That seasonal demand pattern is common in many African markets at month-end, when firms typically increase purchases of dollars for trade settlement and offshore payments.
In Kenya, the picture was more stable.
The Kenyan shilling is expected to remain broadly steady in the coming days, supported by what traders described as limited appetite for hard currency.
On Thursday, the currency traded at around 129.70/90 per dollar, compared with 129.40/60 at the close of last week.
While that represented a slight weakening, dealers said there was little sign of major stress in the market.
The regional outlook reflects the familiar pressures shaping African foreign exchange markets: import demand, liquidity conditions, central bank interventions and the timing of external inflows.
It also comes at a time when broader global uncertainty including volatility in energy prices and tighter financial conditions is keeping many frontier and emerging market currencies under close watch.
For Ghana in particular, the near-term focus will remain on whether the supply of foreign exchange can improve enough to ease pressure on the cedi.
Without that, traders say the local currency is likely to remain on the defensive, even if depreciation stays gradual rather than abrupt.
Across the region, the coming week is expected to test how resilient African currencies remain as businesses, banks and investors navigate tight liquidity and shifting demand for dollars.
