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WEEKAHEAD-AFRICA-FX-The Nigerian naira is seen stable around the prevailing level – Reuters

HomeNewsWEEKAHEAD-AFRICA-FX-The Nigerian naira is seen stable around the prevailing level – Reuters
WEEKAHEAD-AFRICA-FX-The Nigerian naira is seen stable around the prevailing level – Reuters
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    Alex Ikechukwu
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NAIROBI May 4 (Reuters) – Traders expect the Kenyan shilling to weaken next week, with increased oil importer demand outweighing waning dollar inflows, while Ghana’s cedi will be stable due to central bank support.


The Kenyan shilling could weaken due to increased oil importer demand outweighing dwindling dollar inflows from offshore investors buying government debt, traders said.

At 0837 GMT, commercial banks quoted the shilling at 103.10/20 to the dollar compared with 103.15/25 last Thursday.

“Against the bulk of importer demand, we’re likely to see a slowdown in the foreign investment coming in,” a trader at a commercial bank said.


Ghana’s cedi is seen stable against the dollar next week and beyond as central bank support and growing investor interest following a change of government increase dollar inflows, analysts said.

The currency stood at 4.2100 to the dollar on Thursday, said Joseph Biggles Amponsah of Dortis Research in Accra. It touched record lows of 4.7420 last month before recouping lost ground.

“For the better part of the month of May, the local currency is expected to remain fairly stable as investor interest in the country deepens. The central bank’s activities in the market has also heightened confidence in the cedi,” Amponsah said.


The Nigerian naira is seen stable around the prevailing level in the coming days as the central bank continues to open up the foreign exchange market and pump in more dollar liquidity to support the local currency.

The local currency was quoted at 391 to the dollar on the black market on Thursday, compared with 388 last week, while it traded at 306.25 on the official interbank market against 305.90 a dollar last week.

Traders said the central bank’s resolve to improve liquidity in the forex market has continued to have a positive impact and improved foreign investor confidence in the forex market of Africa’s biggest economy.

The central bank has been intervening on the official market to try to narrow the spread between the two markets since intervention began in February and has sold about $4 billion, analysts said, a pace they doubt it can sustain.


The Ugandan shilling is seen weakening in the days ahead, weighed by demand from construction firms involved in the development of the energy and transportation sectors.

At 1017 GMT commercial banks quoted the shilling at 3,625/3,635 against the dollar, compared to last Thursday’s close of 3,635/3,645.

“There’s significant enthusiasm to expedite these projects, so we expect quite strong demand from these firms to pay for imported machinery and other materials,” said a trader from a leading bank, who said the shilling would likely oscillate between 3,625-3,650 against the greenback until next Thursday.


Tanzania’s shilling is seen holding steady, with commercial banks quoting it at 2,235/2,245 to the dollar, compared with last Thursday’s close of 2,232/2,242.

“We have seen slight increase in demand on the interbank as well as from corporate, but it has been matched by the inflows as well. Demand is coming from oil importers and manufacturing. Inflows are coming from the mining sector,” a trader at CRDB Bank said.


Zambia’s kwacha is expected to recover against the dollar next week. At 1214 GMT it stood at 9.2250 to the dollar compared with last Thursday’s close of 9.3506.

“We are likely to see a slight appreciation of the kwacha next week as companies convert dollars to the local currency to pay tax which is due on 10 May,” independent financial analyst Maambo Hamaundu said. (Reporting by George Obulutsa, Matthew Mpoke Bigg, Oludare Mayowa, Elias Biryabarema, John Ndiso and Chris Mfula; Compiled by Nqobile Dludla; Editing by Alexander Smith)


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