Ghana’s cedi is forecast to strengthen marginally against the United States dollar in the coming week, bolstered by sustained central bank support and improved interbank market liquidity. Meanwhile, Zambia’s kwacha remains under downward pressure as demand for hard currency continues to outstrip supply. Traders across East and West Africa anticipate general stability in the currencies of Kenya, Nigeria, and Uganda, underpinned by a combination of central bank interventions and seasonal demand fluctuations.
In Ghana, the cedi traded at 15.4300 per dollar on Thursday, improving slightly from 15.4500 recorded at the previous week’s close, according to LSEG market data. Market participants attribute the cedi’s modest gains to proactive measures by the Bank of Ghana, which have included increased dollar liquidity injections and strategic support to market makers.
Sedem Dornoo, a senior trader at Absa Bank Ghana, noted that bid-offer spreads in the interbank market have narrowed significantly as liquidity conditions improved. “The cedi has rallied this week on the back of increased support from the central bank. Interbank liquidity has improved with bid-offer spreads tightening significantly as more market makers have actively shown firm prices,” he stated.
Market expectations suggest this trend may continue in the near term, as foreign exchange supply remains strong and domestic confidence gradually improves. The central bank’s prudent monetary stance, which includes controlling inflation and maintaining favourable interest rate differentials, has contributed to enhanced FX market dynamics. However, broader macroeconomic headwinds, particularly relating to external debt sustainability and global risk sentiment, may temper any substantial appreciation of the local unit.
In Zambia, the kwacha traded at 28.67 per dollar on Thursday, a marginal gain from 28.75 a week earlier. Despite the slight improvement, market analysts describe the currency as still being under pressure, largely due to insufficient foreign exchange inflows. Access Bank, in its weekly financial market commentary, indicated that “the kwacha remains susceptible to further losses in the absence of meaningful foreign currency inflows or a shift in macroeconomic fundamentals.”
As the world’s second-largest copper producer, Zambia’s fiscal health is heavily influenced by commodity exports. While copper prices have seen modest gains globally, the translation into foreign exchange reserves has been hampered by structural issues, including delayed debt restructuring and constrained investor sentiment. The kwacha’s recent trajectory suggests continued vulnerability, particularly in the face of sustained dollar demand from importers and limited support from the country’s external balance position.
Kenya’s shilling, by contrast, is anticipated to remain stable over the coming week. The unit was quoted at 129.40/129.90 per dollar on Thursday, compared to 129.25/129.75 a week prior. Market observers point to a relatively balanced forex market, with the Central Bank of Kenya maintaining sufficient intervention capacity to stabilise the exchange rate.
Domestic demand for hard currency has remained consistent, supported by seasonal importer activity. Nonetheless, broader policy reforms introduced by the Kenyan government have provided a degree of comfort to investors, reducing speculative trading and allowing the shilling to settle within a predictable band.
Nigeria’s naira is also projected to hold steady, following substantial central bank interventions in the foreign exchange market. The naira traded around 1,599 to the dollar in intraday transactions on Thursday, a recovery from 1,630 observed in the previous week. The currency was offered at approximately 1,610 on the parallel market.
Foreign exchange traders suggest that the Central Bank of Nigeria’s recent efforts to manage liquidity and provide targeted dollar sales to authorised dealers have been effective in stemming the naira’s depreciation. One market participant stated: “The central bank has been able to stem the fall in the naira exchange rate, and this means we see the unit stabilising around 1,600 in the coming week.”
This intervention aligns with broader fiscal and monetary reforms initiated by Nigeria’s government, including efforts to unify the country’s multiple exchange rates and encourage foreign capital inflows. While longer-term risks remain, including inflationary pressures and fiscal deficits, the short-term outlook for the naira appears relatively stable.
Uganda’s shilling is likewise expected to maintain stability, buoyed by a temporary lull in dollar demand due to the Easter holiday period. The local unit was quoted at 3,660/3,670 on Thursday, slightly firmer than the 3,680/3,690 close a week earlier.
A Kampala-based foreign exchange trader highlighted the impact of the holiday season on market activity, noting that “we have an Easter holiday and some businesses will be closed so on the demand side we anticipate weak activity.” This decline in commercial dollar demand is likely to support the shilling in the short term, although longer-term trends will depend on export performance and regional capital flows.
Across the region, monetary authorities have played a pivotal role in anchoring currency expectations. Central banks in Ghana, Nigeria, and Kenya, in particular, have actively used foreign exchange reserves to smooth volatility, while countries like Zambia face more structural limitations in their ability to do the same.
As global economic uncertainty persists—fuelled by geopolitical tensions and lingering effects of U.S. trade policies—African currencies remain sensitive to both domestic fundamentals and international developments. A cautious but active policy posture by regional central banks appears to be the defining factor in navigating these challenges.
