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WEEKAHEAD-AFRICA-FX-Nigeria’s naira is seen trading in a narrow range – Reuters

HomeNewsWEEKAHEAD-AFRICA-FX-Nigeria’s naira is seen trading in a narrow range – Reuters
WEEKAHEAD-AFRICA-FX-Nigeria’s naira is seen trading in a narrow range – Reuters
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    Alex Ikechukwu
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NAIROBI, March 9 (Reuters) – The Kenyan shilling is seen depreciating in the week ahead through next Thursday as hard currency inflows into local debt auctions slows while Ghana’s cedi is seen firming on healthy offshore appetite for the country’s debt.


The Kenya shilling could come under pressure from a potential fall in dollar inflows into the local debt market as the government seeks to contain yields.

At 1111 GMT, commercial banks quoted the shilling at 102.40/60 to the dollar, compared with 102.70/90 at last Thursday’s close.

The government has cancelled several debt auctions this year to object to what it considers as high bids, angering market participants.

“That may stem further flow of dollars in the fixed income market,” said a trader from a commercial bank.


The Tanzanian shilling is seen holding steady in the days ahead, helped by a slowdown in business activity.

Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, unchanged from a week ago.

“There isn’t much activity in the economy from either the import or export sides. The shilling will likely remain flat next week,” said a trader at a commercial bank.


The kwacha is expected to continue trading with a bullish tone against the dollar next week as firms convert their dollar holdings to meet their local tax obligations.

Commercial banks quoted the currency of Africa’s second largest copper producer at 9.5760 per dollar from a close of 9.6500 a week ago.

“Value Added Tax is due on Thursday next week and this should lead to dollar conversions,” one commercial bank trader said.


Ghana’s volatile cedi is seen firm after recovering this week on central bank dollar sales and improved offshore forex inflows ahead of a three-year domestic bond sale on Thursday.

After touching record lows this month, the cedi recovered to 4.6750 per dollar by mid-morning on Thursday compared to 4.7400 last week. The Cedi is down around 10 percent since January, according to Reuters data.

“The cedi is likely to trade around the 4.65 levels in the wake of improved forex supply, partly owing to investor interest in the 3-year bond issue,” Joseph Biggles Amponsah, analyst at the Accra-based Dortis Research said.


Nigeria’s naira is seen trading in a narrow range in the coming days, with the central bank injecting more dollars into the market in its move to narrow the margin between official and parallel market exchange rates.

The local currency was quoted at 465 a dollar on the black market on Thursday, weaker than the 450-a-dollar level last week. Commercial lenders quoted the naira at 306.20 a dollar on the interbank market compared with 305.50 it closed at last week.

“The central bank should align the multiple exchange rates in the market to restore investors’ confidence and ensure the effectiveness of its new policy,” one trader said.


The Uganda shilling is seen trading with a mild bias as demand for dollars from government agencies and foreign-owned firms picks up.

At 1217 GMT commercial banks quoted the local currency at 3,595/3,605, weaker from last Thursday’s close of 3,590/3,600.

David Bagambe, trader at Diamond Trust Bank, said dollar demand from government agencies tends to pick up around March.

“Plus some corporates will be buying (dollars) for dividends pay out… I think the overall trend will a depreciation bias,” he said. (Reporting by Kwasi Kpodo; Elias Biryabarema; Duncan Miriri; Oludare Mayowa; Fumbuka Ng’wanakilala and Chris Mfula. Compiled by Elias Biryabarema, editing by Pritha Sarkar)


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