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WEEKAHEAD-AFRICA-FX-Naira trading in a tight range – Reuters

HomeNewsWEEKAHEAD-AFRICA-FX-Naira trading in a tight range – Reuters
WEEKAHEAD-AFRICA-FX-Naira trading in a tight range – Reuters
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NAIROBI, Nov 17 (Reuters) – The Kenyan and Ugandan shillings
are seen weakening in the week to next Thursday, while Zambia’s
kwacha is seen strengthening, traders said.

The Kenyan shilling could weaken due to sustained
corporate demand outweighing dollar inflows, traders said.
At 0750 GMT, commercial banks quoted the shilling at
101.80/102.00 to the dollar, compared with 101.60/70 at last
Thursday’s close.
“Corporate demand appears not to have reduced,” said a
trader from a commercial bank.

The Ugandan shilling is seen weakening, hit by dollar
demand from offshore investors cutting positions in local
government debt.
Commercial banks quoted the shilling at 3,590/3,600, weaker
than last Thursday’s close of 3,525/3,535.
“We’ve been seeing a lot of offshore people who are selling
their local debt holdings exerting demand … this pressure will
continue to weigh on the local unit,” said Faisal Bukenya, head
of market making at Barclays Bank Uganda.

The naira is expected to trade in a tight range in
the official and parallel markets as Africa’s biggest economy
struggles to curb speculation on the local currency and reduce
pressure on its dwindling dollar stocks.
The naira was quoted at 465 to the dollar on the parallel
market on Thursday against 460 per dollar last week, while
commercial lenders quoted the local currency at 314.80 to the
dollar in the official interbank window.
“The central bank has intensified its effort to manage the
exchange rate at the present level by influencing how the scarce
dollar is sold at the parallel market, while selling dollar
daily at the interbank market to keep the naira from falling
further,” a trader at one commercial bank said.

Ghana’s cedi could weaken marginally on growing
seasonal dollar demand by businesses settling their end of year
import bills.
The local currency, which has been fairly stable this year,
traded weaker this week, touching 4.0400 to the dollar by 1100
GMT on Thursday compared with 3.9900 a week ago.
“Demand for the greenback is expected to remain firm amidst
lower supply and this could lead importers to buy-and-hold forex
for future use,” said analyst Joseph Biggles Amponsah of
Accra-based Dortis Research.

The kwacha is expected to firm, supported by dollar
conversions by companies preparing to pay salaries and other
month-end costs as well as offshore players taking part in a
bond auction on Nov. 18.
Commercial banks quoted the kwacha at 9.9150 per dollar from
9.8400 a week ago.
“We expect the kwacha to be firmer because corporates will
be selling dollars to meet month-end obligations. Offshore
players are also in the market selling dollars,” Kabwe Mwaba,
Standard Chartered Bank’s local head of financial markets and
asset and liability management said.

(Reporting by John Ndiso, Elias Biryabarema, Chris Mfula, Kwasi
Kpodo and Oludare Mayowa; Compiled by George Obulutsa; Editing
by Mark Potter)

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