The forex market in Africa is experiencing notable currency fluctuations, with Zambia’s kwacha gaining strength against the U.S. dollar, while Ghana’s cedi and Uganda’s shilling continue to face downward pressure. Meanwhile, Kenya’s shilling remains relatively stable amid these regional currency movements.
Zambia’s kwacha has risen to 18.69 per U.S. dollar, improving from 19.01 just a week ago. This positive shift is largely driven by consistent foreign exchange inflows from the mining sector, particularly as copper prices stay near historic highs. Analysts point out that Zambia’s dedollarisation policy, introduced last December, along with ongoing efforts to restructure national debt, have boosted investor confidence. These combined factors have strengthened the kwacha and supported its recent gains in the forex market.
Conversely, Ghana’s cedi continues to weaken against the dollar, trading at 11.67 compared to 11.54 the previous week. Experts attribute this depreciation to sustained corporate demand for foreign currency, mainly due to import payments and dividend repatriation. The imbalance between high dollar demand and limited supply in Ghana’s interbank forex market is expected to keep pressure on the cedi for the foreseeable future.
Uganda’s shilling has also experienced slight weakening, currently trading between 3,770 and 3,780 per dollar. This decline comes as market participants increase their foreign currency holdings ahead of Uganda’s upcoming budget announcement on June 11. The uncertainty around possible new tax measures prompts banks, importers, and other stakeholders to build up forex reserves as a precaution.
In contrast, Kenya’s shilling has maintained relative stability despite regional volatility. It was last quoted between 129.25 and 129.65 per dollar with only minor fluctuations from recent levels. This steadiness reflects a balanced supply and demand environment within Kenya’s forex market amid broader currency pressures in neighboring countries.
These divergent currency trends highlight how regional economic factors and external market forces continue to influence forex market dynamics across East and Southern Africa. Zambia’s reliance on mineral exports provides a solid foundation for its currency strength, while Ghana and Uganda grapple with challenges tied to trade-related foreign currency demands and fiscal policy uncertainties. Kenya’s steady currency performance offers some reassurance for investors navigating this volatile regional landscape.
Market watchers will be paying close attention to upcoming policy announcements and commodity price developments to assess their potential effects on these currencies in the weeks ahead.
