Zambia’s Kwacha Under Pressure as Other African Currencies Remain Stable

Zambia’s kwacha faces pressure due to high demand for hard currency, trading at 28.36 per dollar. In contrast, Nigeria’s naira remains stable at 1,501 to the dollar, supported by central bank dollar sales. Ghana’s cedi is stable at 15.45 per dollar, while Uganda’s shilling trades at 3,676/3,686, buoyed by coffee exports.

Zambia’s currency, the kwacha, is anticipated to remain under significant pressure in the coming week, with continued demand for hard currency exceeding its supply. As of Thursday, the kwacha was priced at 28.36 per dollar, a decline from 28.15 per dollar the previous week. Analysts at the Zambia National Commercial Bank projected that the kwacha may face minor losses due to limited supply in the near term.

In contrast, Nigeria’s naira is expected to maintain a stable range thanks to regular dollar sales initiated by the central bank to stabilize the currency. On Thursday, the naira was quoted at 1,501 to the dollar, slightly improving from 1,508 naira the previous week. Traders forecast the naira will trade between 1,490 and 1,510 naira next week, as the government seeks to keep rates around 1,500 naira.

Ghana’s cedi is also projected to remain stable, bolstered by diminished foreign-currency demand and substantial support from the central bank. Recently, the cedi was trading at 15.45 to the dollar, a slight improvement over its prior week’s close of 15.50. According to Sedem Dornoo, a senior trader at Absa Bank Ghana, this stability is likely to continue due to an equilibrium between foreign exchange supply and demand.

Similarly, Uganda’s shilling is expected to hold steady, receiving support from coffee exports. Commercial banks have quoted the shilling at 3,676/3,686 to the dollar, slightly up from 3,665/3,675 the week before. Traders predict the shilling will fluctuate between 3,650 and 3,680 in the near future, primarily driven by elevated flows from the coffee industry.

In summary, Zambia’s kwacha is likely to struggle due to a persistent supply-demand imbalance, while other African currencies, such as the naira, cedi, and shilling, are expected to experience stability owing to central bank interventions and specific economic factors. Stakeholders will closely monitor these currencies as they navigate varying economic pressures in their respective markets.

Original Source: www.brecorder.com