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WEEKAHEAD-AFRICA-FX- Naira is seen trading within a narrow range – Reuters

HomeNewsWEEKAHEAD-AFRICA-FX- Naira is seen trading within a narrow range – Reuters
WEEKAHEAD-AFRICA-FX- Naira is seen trading within a narrow range – Reuters
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    Alex Ikechukwu
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NAIROBI, May 18 (Reuters) – Ghana’s cedi and Zambia’s kwacha are seen weakening in the next week to Thursday, while Kenya and Tanzania shillings are expected to hold steady, traders said.


The shilling is seen holding steady, supported by dollar inflows from tea exporters and subdued demand from oil importers, traders said.

Commercial banks quoted the shilling at 103.20/40 to the dollar, compared with 103.40/50 at last Thursday’s close.

“This week they sold dollars into the market and they should also be there next week,” said a trader from a commercial bank referring to dollar sales from a tea exporter.


The Tanzanian shilling is seen stable as importers cool their appetite for dollars due to a slowdown in business activity.

Commercial banks quoted the shilling at 2,235/2,245 to the dollar on Thursday, weaker than 2,230/2,240 a week ago.

“U.S. dollars have become a bit scarce in the market right now following a decline in supply, but there isn’t any huge demand for greenbacks … so we expect the shilling to trade in the same levels next week,” said a trader at Commercial Bank of Africa Tanzania.


The Ugandan shilling is seen gaining ground, helped by tight liquidity and muted dollar demand from commercial banks.

Commercial banks quoted the shilling at 3,617/3,627, stronger than last Thursday’s close of 3,632/3,642.

The central Bank of Uganda on Thursday removed over a trillion Ugandan shillings ($276.55 million) from the interbank market via a seven-day repo and two deposit auctions of longer tenors.

A trader at a leading commercial bank said the mop up combined with this week’s tax payments would “keep appetite for the dollar on the lower side.”


The naira is seen trading within a narrow range on the back of central bank injection of dollars to improve liquidity and narrow the spread between official and black market rate.

It was quoted at 306.10 to the dollar on the official interbank market, from 305.60 last week.

It was quoted at 385 per dollar on the black market, firmer than 390 a dollar a week ago.

It was quoted at 382 per dollar at the investor’s window where they could trade foreign exchange at rates set by buyers and sellers, according to the market regulator FMDQ OTC Securities Exchange.

“We see naira trading within the prevailing rate as the central bank sustains its dollar sales in the coming week,” one senior currency trader said.


Ghana’s cedi could remain under pressure mainly on surging dollar demand by foreign investors and local businesses despite weekly greenback sales by the central bank, analysts said.

The local unit had been firm through the end of April until last week when it began to weaken. It was trading at 4.2392 to the dollar by midday on Thursday compared to 4.1983 a week ago.

“A deepening of the central bank’s intervention is necessary to keep the cedi under 4.4000 in order not to trigger any form of panic-buying,” Joseph Biggles Amponsah of the Accra-based Dortis Research said.


The kwacha is likely to trade on the back foot against the U.S. dollar next week due to rising demand for hard currency from importers.

Commercial banks quoted the kwacha at 9.2700 per dollar, slightly softer than a close of 9.1750 a week earlier.

“After a good run, the kwacha is coming under some pressure from growing demand for dollars from importers. Resistance level is seen at 9.400,” one senior commercial bank trader said.

(Reporting by John Ndiso, Elias Biryabarema, Fumbuka Ng’wanakilala, Kwasi Kpodo and Oludare Mayowa; Compiled by George Obulutsa, editing by Pritha Sarkar)

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