Kampala — Uganda’s currency is expected to fall further over the next week to Thursday after hitting its weakest-ever level against the dollar, those of Zambia and Ghana may also be under pressure, and Kenya’s is expected to remain stable, traders said.
UGANDA
Uganda’s shilling is likely to extend recent losses after setting a new record low on Thursday, weighed down by strong foreign-currency demand from energy and merchandise importers.
LSEG data showed the shilling trading as weak as 3,965/3,975 to the dollar, a new historic low, compared with 3,925/3,935 at last week’s close.
Stephen Kaboyo, managing director of Kampala-based financial services firm Alpha Capital Partners, said the currency was taking strain as people were rushing to buy dollars ahead of the peak import season.
A trader said dollar demand from energy importers was expected to remain elevated as the Iran war drives uncertainty over fuel supplies and financial market volatility.
The central bank raised banks’ cash reserve requirement two weeks ago as the shilling weakened.
It has said it does not plan to directly intervene in the currency market through dollar sales.
ZAMBIA
Zambia’s kwacha could slide following a sharp fuel price increase announced on Wednesday.
“Over the coming days, oil marketing companies are expected to start stocking up (on) hard currency for fuel purchases,” a financial analyst said.
Zambia’s energy regulator raised petrol and diesel pump prices by about 24%, citing higher global oil prices, a weaker kwacha and the reinstatement of excise duty on fuel imports.
Over the past week the kwacha was little changed. It was trading at 19.95 per dollar on Thursday, from 19.94 a week ago.
GHANA
Ghana’s cedi is expected to continue losing ground on persistent dollar demand.
LSEG data showed the cedi at 11.70 to the dollar compared to 11.60 a week earlier.
“The cedi traded with a weakening tone throughout the week as demand for the greenback remained resilient against a backdrop of tight market liquidity,” said Ronald Mensah, a trader at Stanbic Bank Ghana.
“Barring a meaningful improvement in supply conditions, the cedi is likely to maintain its weakening bias,” he added.
KENYA
Kenya’s shilling is forecast to be stable against the dollar.
Commercial banks quoted the shilling at 129.45/65 per dollar, within touching distance of last Thursday’s close of 129.35/55.
*Elias Biryabarema, Chris Mfula, Christian Akorlie and George Obulutsa; Editing: Sfundo Parakozov and Alexander Winning – Reuters
