LAGOS Oct 27 (Reuters) – Nigeria’s and Uganda’s currencies are expected to strengthen next week, while those of Kenya and Zambia are seen weakening.
Nigerian naira is seen reversing its losses as traders anticipate improved dollar supply from international money transfer agencies to ease a shortage, which has pushed down the local currency this week.
The naira fell to 470 to the dollar on the black market on Thursday, from 455 a dollar last week because of surged in demand from small businesses and parents buying hard currencies to pay school fees abroad. The currency has remained stable at 305.50 to the dollar on the official window due to support from the central bank.
“The naira should appreciate gradually in the coming days after the expected sales of about $21 million by Travelex today (Thursday), and subsequent extension of dollar sales to bureau de change operators in the other part of the country,” Aminu Gwadabe, president of the association of bureau de change operators, said.
Travelex and First Bank are authorised by the central bank to sell dollar to bureaux de change to boost liquidity and narrow the gulf with the official rate.
Ghana’s cedi is seen stable in the week ahead on matching greenback inflows to demand as the next tranche of a $1.8 billion syndicated cocoa loan hits central bank reserves this week.
The cedi has been fairly steady in recent weeks on positive investor sentiments, buoyed by a successful third review of the country’s 3-year aid programme with the International Monetary Fund. It was trading at 3.9770 to the dollar at 1100 GMT on Thursday, down around 4 percent since January.
“The local currency is expected to remain fairly stable in Q4 despite the seasonal high demand for dollars in the last quarters and notwithstanding the general election and its accompanying spending,” currency analyst Joseph Biggles Amponsah of the Accra-based Dortis Research said.
The Ugandan shilling is forecast to strengthen marginally in coming days, underpinned by inflows from coffee exporters and non-governmental organisations.
At 0953 GMT commercial banks quoted the shilling at 3,460/3,470, weaker than last Thursday’s close of 3,440/3,450.
“We have some inflows from sources like coffee and NGOs but also demand (for dollars) tends to cool when the unit hits 3,465/75,” said Benon Okwenje, trader at Stanbic Bank.
The Kenyan shilling is expected to weaken marginally due to an increase in end-month dollar demand, although traders expect the regulator to intervene should volatile movement result.
At 0848 GMT, commercial banks quoted the shilling at 101.35/55 to the dollar, compared with 101.30/40 at last Wednesday’s close. Thursday was a public holiday.
The Tanzanian shilling is seen holding its ground in the days ahead, helped by a slowdown in demand for U.S. dollars from energy and manufacturing firms.
Commercial banks quoted the shilling at 2,178/2,188 to the dollar on Thursday, stronger than 2,184/2,189 a week ago.
“The outlook is that the shilling is expected to be stable next week due to limited activities in the market,” said William Francis, a dealer at Commercial Bank of Africa Tanzania.
The kwacha is likely to lose ground versus the greenback next week as the supply of dollars in the market dries up.
At 1200 GMT on Thursday, commercial banks quoted the currency of Africa’s second-biggest copper producer at 9.7800 per dollar, unchanged from a week ago.
“Next week is the first week of the month so there should be some pressure on the kwacha because everyone will have converted their dollars,” one commercial bank trader said, referring to month-end dollar conversions to the local unit to pay salaries. (Reporting by Oludare Mayowa, Kwasi Kpodo, Elias Biryabarema, John Ndiso, Fumbuka Ng’wanakilala, Chris Mfula; Compiled by Olivia Kumwenda-Mtambo; Editing by Robin Pomeroy)
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