In the coming week, Kenya’s shilling is likely to weaken against the dollar due to increased demand from oil-retailing companies, amid broader market uncertainties. Meanwhile, Uganda’s shilling, Nigeria’s naira, and Ghana’s cedi are expected to remain broadly stable, according to Forex traders.
Kenya’s shilling is predicted to slip further as oil-retailing companies ramp up their dollar demand. This increased demand coincides with a cautious market environment, where participants are hesitant to make significant bets due to uncertainties surrounding the national budget and an anticipated International Monetary Fund (IMF) disbursement.
Currently, commercial banks have quoted the shilling at 128.75/129.75 per dollar, a slight decline from last Thursday’s closing rate of 127.75/128.75.
Last month, Kenya reached a staff-level agreement with the IMF, setting the stage for a disbursement of approximately $976 million, pending board approval. However, recent political developments have complicated the situation. President William Ruto’s withdrawal of planned tax hikes in response to nationwide protests has raised concerns among analysts about Kenya’s ability to meet key IMF programme targets.
“There’s an element of, you know, wait and see. We still need to hear from the IMF and even from Treasury regarding what the final budget will look like,” commented one trader.
In contrast, the currencies of Uganda, Nigeria, and Ghana are expected to remain stable, with no significant fluctuations anticipated in the near term. Traders are watching the market closely, but no major economic events are predicted to significantly impact these currencies.
