LAGOS Nov 10 (Reuters) – Nigeria’s naira is likely to strengthen in the parallel market next week after a decision to regulate rates and curb speculation, while Zambia’s kwacha will come under pressure as dollar demand increases for importers ahead of Christmas.
The naira is seen trading firmer in the parallel market after security agencies arrested some black market forex dealers and the decision of bureau de change operators to regulate rates and curb speculation on the local currency.
“We have agreed among ourselves that the naira should be traded within a band of 390/400 a dollar at the bureau de change level, this is our own way of cutting off speculators from the market,” Aminu Gwadabe, president of bureau de change operators said.
The naira was quoted at 460 to the dollar at the parallel market on Thursday, firmer than 470 per dollar a week ago, while at the official window it was quoted at 315.50 to the dollar by commercial lenders. The naira is seen closing at 305.5 to the dollar after the central bank’s expected intervention in the market.
The kwacha is likely to come under pressure due to increasing dollar demand among importers ahead of Christmas.
At 1200 GMT on Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.8400 per dollar from 9.8100 a week ago.
“Sustained demand for the greenback amid thin supply is likely to keep the Kwacha on the back foot in the short term,” Zambia National Commercial Bank said in a note.
Pressure on Ghana’s cedi could extend to next week until a planned central bank foreign exchange auction on the interbank market later this month.
The local unit traded slightly down to touch 3.9965 to the dollar by 1100 GMT on Thursday, from around 3.9800 a week ago.
“In the week ahead, the USD/GHS is expected to break the 4.0000 resistance amidst growing demand for the greenback towards last quarter bills,” said analyst Joseph Biggles Amponsah of the Accra-based Dortis Research.
The Ugandan shilling is expected to trade with a weakening tone over the coming days as energy firms buy dollars.
At 0918 GMT, commercial banks quoted the shilling at 3,520/3,530, weaker than last Thursday’s close of 3,490/3,500.
“Importers like energy firms are now moving to build stocks for holidays… we expect higher (dollar) appetite from them in coming days,” said a trader from a leading commercial bank.
The Kenyan shilling could weaken marginally due to higher demand for dollars by firms and the central bank is likely to pump in dollars if extreme volatility sets in.
At 0925 GMT, commercial banks quoted the shilling at 101.60/80 to the dollar, compared with 101.50/70 at last Thursday’s close.
“We expect the monetary authority to directly support the shilling should there be a one way loss,” said a trader from a commercial bank.
The Tanzanian shilling is expected to hold steady in the days ahead with a slight chance of weakening if demand for U.S. dollars from importers gathers momentum.
Commercial banks quoted the shilling at 2,174/2,184 to the dollar on Thursday, stronger than 2,178/2,185 a week ago.
“There isn’t much volatility in the market at the moment. We expect the shilling to be range bound in the 2,170-2,180 levels next week,” said William Francis, a trader a Commercial Bank of Africa Tanzania. (Reporting by Oludare Mayowa, Chris Mfula, Kwasi Kpodo, Elias Biryabarema, John Ndiso, Fumbuka Ng’wanakilala; Compiled by Tanisha Heiberg; Editing by James Macharia)
Connect via email
- Nigeria’s Buhari returns home after three-month sick leave in Britain – Reuters
- Naira falls against dollar at parallel market – NAN
- Nigeria strengthening economy attracts forex traders – The Cable
- Permanent secretary forfeits N664m, $137,680.11,properties to FG – THE NEWS NIGERIA
- Naira to weaken further as dollar demand increases – PUNCH