Zambia’s Currency Faces Pressure Amidst Regional Stability in Other African Economies

Zambia’s kwacha is under pressure due to high demand for hard currency. The naira is stable with central bank support, while Ghana’s cedi remains steady amid low foreign exchange demand. Uganda’s shilling benefits from coffee export flows, indicating a generally stable outlook across these currencies, except for Zambia.

Zambia’s currency, the kwacha, faces ongoing pressure due to a persistent demand for hard currency that exceeds supply. As of Thursday, the kwacha was valued at 28.36 per dollar, a slight decline from 28.15 per dollar the previous week. The Zambia National Commercial Bank noted that the kwacha is likely to incur minor losses in the short term because of limited foreign currency availability.

In contrast, Nigeria’s naira is expected to remain stable within a certain range, thanks to consistent central bank interventions aimed at supporting the currency. The naira was quoted at 1,501 to the dollar on Thursday, compared to 1,508 the week prior. Traders anticipate that the naira will trade between 1,490 and 1,510 naira in the upcoming week.

Ghana’s cedi is projected to show minimal change, bolstered by sustained central bank support and subdued foreign currency demand. On Thursday, the cedi was trading at 15.45 to the dollar, slightly down from 15.50 the previous week. A trader from Absa Bank Ghana expressed confidence that the cedi would maintain relative stability, as the supply and demand dynamics for foreign exchange are in balance.

Similarly, Uganda’s shilling is expected to remain broadly stable, aided by the inflow of coffee exports. Commercial banks quoted the shilling at 3,676/3,686 per dollar on Thursday, up from last week’s 3,665/3,675. A trader noted that robust flows from the coffee sector are likely to influence the shilling’s movement in the near future, projecting a range of 3,650 to 3,680 in the upcoming week.

The currency landscapes in Zambia, Nigeria, Ghana, and Uganda reveal a mixed outlook. While Zambia’s kwacha continues to struggle with demand outstripping supply, the naira, cedi, and shilling show signs of stability through various factors including central bank support and sectoral currency demands. As these currencies move forward, monitoring these key indicators will be vital for understanding their trajectories.

Original Source: www.brecorder.com