The currencies of Uganda and Kenya are expected to strengthen in the coming week, while Zambia’s kwacha could weaken, traders said on Thursday, as movements in global oil prices and foreign exchange demand shape African markets.
Uganda’s shilling is showing signs of recovery after a sharp decline in demand for foreign currency from energy importers.
Commercial banks quoted the shilling at around 3,645 to 3,655 against the US dollar on Thursday, compared with 3,765 to 3,775 a week earlier.
Traders said lower global oil prices following a reported U.S.-Iran peace deal had reduced pressure from fuel importers seeking dollars.
“The momentum is on the firming side in the short term,” one trader said, predicting the shilling could strengthen further toward 3,600 per dollar in the coming days.
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Kenya’s shilling is also expected to record modest gains, supported by optimism that the reopening of the Strait of Hormuz could ease energy supply concerns.
The currency traded around 129.45 to 129.55 per dollar on Thursday, broadly unchanged from the previous week.
Kenya relies heavily on fuel imports from the Middle East through government-to-government supply arrangements, making global energy disruptions a key factor affecting foreign exchange demand.
In contrast, Zambia’s kwacha is expected to remain under pressure as demand for hard currency rises.
The kwacha traded at about 18.05 per dollar on Thursday, weaker than 17.54 a week earlier.
A trader said increased demand for dollars from fuel, fertiliser and mining equipment imports, combined with slower foreign currency inflows, was weighing on the currency.
Ghana’s cedi is expected to remain relatively stable, supported by central bank interventions and foreign exchange inflows from the mining sector.
The cedi traded at 11.15 per dollar on Thursday, compared with 11.00 a week earlier.
At the latest foreign exchange auction, demand reached about $295 million against an offered amount of $130 million, but the central bank allocated nearly the entire requested amount at about $291 million.
“These interventions, together with FX inflows from the mining sector, are expected to cool off FX demand,” said Bertrand Baazeng, a trader at Absa Bank Ghana.
Nigeria’s naira is also forecast to remain stable, helped by foreign investor demand for local assets.
The naira traded at around 1,358 per dollar on the official market on Thursday, compared with 1,359 a week earlier, while street market rates stood around 1,403 per dollar.
A trader said the currency was likely to remain within a range of 1,350 to 1,360 per dollar in the coming week as foreign institutions continue buying Nigerian securities.
African currencies are expected to remain sensitive to global oil prices, commodity flows and investor sentiment as markets assess the impact of shifting geopolitical developments.
