Ghana cedi, Nigerian naira and Ugandan shilling expected to face pressure next week

The Ghana cedi, Nigerian naira and Ugandan shilling are expected to come under renewed pressure in the coming week, while the Kenyan shilling and Zambian kwacha are likely to remain broadly stable, according to a survey of traders conducted by Reuters.

For Ghana, traders said the cedi could weaken further as strong demand for US dollars continues to outstrip supply on the interbank market, particularly from companies importing petroleum products.

According to LSEG data cited by Reuters, the cedi traded at GH¢11.53 to the US dollar on Thursday, compared with GH¢11.40 a week earlier.

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Andrews Akoto, Head of Trading at Absa Bank Ghana, attributed the expected pressure on the local currency to rising demand for foreign exchange in the energy sector.

"The dollar is likely to strengthen against the local currency in the coming week as energy-sector FX demand firms alongside rebounding crude oil prices," he said.

Akoto added that the Bank of Ghana's latest foreign exchange auction reflected continued pressure on the market.

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"The last central bank FX auction held on Tuesday attracted bids of US$311 million against an offer of US$110 million, indicating that some unmet demand persists," he noted.

In Nigeria, traders expect the naira to remain under pressure after the Dangote Petroleum Refinery began pricing local fuel sales in US dollars, a move expected to increase demand for the American currency.

The naira traded at 1,383 to the dollar on Nigeria's official market on Thursday, slightly weaker than 1,379 a week earlier, while the parallel market rate stood at around 1,425 per dollar.

A trader told Reuters that the currency could continue to weaken unless global market conditions improve.

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Uganda's shilling is also projected to soften as corporate demand for dollars recovers after businesses complete their mid-month tax payments.

By contrast, traders expect Kenya's shilling to remain stable, supported by balanced foreign exchange demand and supply, while Zambia's kwacha is forecast to hold firm ahead of a treasury bill auction scheduled for July 23.

The Reuters survey reflects growing caution across several African currency markets as businesses continue to monitor global oil prices, foreign exchange liquidity and central bank interventions.