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WEEKAHEAD-AFRICA-FX-Nigerian naira is seen trading within a range – Reuters

HomeNewsWEEKAHEAD-AFRICA-FX-Nigerian naira is seen trading within a range – Reuters
WEEKAHEAD-AFRICA-FX-Nigerian naira is seen trading within a range – Reuters
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    Alex Ikechukwu
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NAIROBI, April 27 (Reuters) – The Zambian kwacha is expected to be stable against the dollar in the week ahead while the Kenyan and Ugandan shillings will come under pressure from importer demand for dollars.


The Zambian kwacha is likely to remain firm against the dollar next week due to tight liquidity and hard currency inflows from foreign investors investing in government securities.

At 0851 GMT, the currency of Africa’s No.2 copper producer was quoted at 9.3200 per dollar from 9.3000 a week ago, according to Thomson Reuters data.

“As long as these conditions are in place we expect the currency to trade in a similar fashion next week. A trading range of between 9.250 and 9.400 is expected,” one trader with a commercial bank said.


The Kenyan shilling is expected to ease in the week ahead due to cyclical end-month demand for dollars from oil and merchandise importers, traders said.

At 0856 GMT, commercial banks quoted the shilling at 103.15/35 per dollar, compared with 103.30/50 at last Thursday’s close.

“There is good demand from retail players and energy. I see the shilling coming under pressure in the short term,” said a trader from a commercial bank.


The Ugandan shilling is expected to weaken and test a key psychological level over the next week, mainly due to demand for dollars by importers.

At 0901 GMT, commercial banks quoted the shilling at 3,635/3,645, weaker than last Thursday’s close of 3,610/3,620.

David Bagambe, a trader at Diamond Trust Bank, said the market expected elevated demand from fuel importers and manufacturers and that “it’s possible this demand will push the rate toward the 3,700 level.”


The Tanzanian shilling is expected to trade in a tight range in the days ahead, underpinned by a slowdown in business activity.

Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, stronger than 2,237/2,242 a week ago.

“The shilling has been stable for quite some time now. We don’t expect it to breach the 2,230-2,240 range next week,” said a trader at a commercial bank.


The Nigerian naira is seen trading within a range in the coming days on the back of the central bank pumping dollars into the foreign exchange market to improve liquidity and narrow the spread between official and black market rates.

The local currency was quoted at 388 to the dollar on the black market on Thursday, stronger than 395 per dollar last week, while it was trading around 305.90 a dollar on the official interbank market compared with 306.20 a dollar last week.

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

On Monday, the bank said it will now allow investors to engage in foreign exchange trading at rates the buyers and sellers set, a move it hopes will increase the amount of dollars available in Africa’s biggest economy.


Ghana’s cedi currency is likely to remain stable against the dollar in the next week and could firm slightly after it swung between 4.1600 to the dollar and 4.2200 in the previous week, a trader said.

“Corporate demand has been firm in the past week, causing the (currency) pair to stay flat despite strong inflows into the market,” said Joseph Biggles Amponsah of Dortis Research in Accra.

“The pair is expected the continue on the same trajectory next week as both sides remain fairly balanced. Bank of Ghana’s forex auctions are also expected to add some firmness to the local currency,” he said.

The cedi touched record lows of 4.720 last month but it has since rebounded, in part because of renewed economic confidence following the annual budget speech in March. (Reporting by John Ndiso, Chris Mfula, Elias Biryabarema, Fumbuka Ng’wanakilala, Oludare Mayowa and Matthew Mpoke Bigg; Editing by Adrian Croft)


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