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WEEKAHEAD-Nigerian naira’s outlook remains stable in the near term – Reuters

HomeNewsWEEKAHEAD-Nigerian naira’s outlook remains stable in the near term – Reuters
WEEKAHEAD-Nigerian naira’s outlook remains stable in the near term – Reuters
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    Alex Ikechukwu
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LUSAKA May 11 (Reuters) – Zambia’s kwacha is expected to firm next week on increased dollar supply in the market ahead of a government bond sale, while the Kenyan shilling is seen slipping on a dollar squeeze amid increased demand from oil importers and general merchants.


The kwacha is expected to stay firm next week due to a tight supply of the local currency and an increasing amount of dollars in the market ahead of the sale of government securities on May 25.

By 1324 GMT on Thursday the kwacha traded at 9.1750 per dollar from 9.1850 a week ago.


The Kenyan shilling is seen easing against the dollar in the coming week due to increased demand from oil importers and general merchants amid low liquidity in the money market, traders said.

At 1100 GMT, commercial banks quoted the shilling at 103.35/45 per dollar, compared with 103.05/25 at last Thursday’s close.

“There are very little inflows, I anticipate the shilling will remain on the back foot,” said a trader from a commercial bank.


The Nigerian naira’s outlook remains stable in the near term as the central bank efforts to improve dollar liquidity and achieve exchange rate convergence yield positive results, but investors remain concerned over the lack of a flexible exchange rate.

The naira firmed to about 305.60 to the dollar on the interbank market from 306.25 last week and was quoted at 390 a dollar on the black market, better than the 391 level where it traded last week.

It was quoted at 382.63 per dollar in the period enabling foreign exchange trading at rates set by buyers and sellers, according to the market regulator FMDQ OTC Securities Exchange.

“We expect the naira to trade within the prevailing band in the coming days, but investors are still worried over the multiplicity of exchange rate in the market,” one senior currency trader said referring to the multiple exchange rate.

The bank has been intervening aggressively since February to try to narrow the spread between the official and black market rates and has sold more than $4 billion.


Ghana’s cedi is expected to remain firm against the dollar next week on central bank support and positive market sentiments that have led to improved interbank greenback inflows, analysts said.

The unit was stable in the past month around 4.22 to the dollar until Wednesday when a surge in corporate demand pushed it down to 4.2450. It however rallied to 4.1983 by midday on Thursday, and is down 0.6 percent since January.

“The cedi is expected to remain firm, with a possible rally, as the regulator continues to implement steps necessary to maintain a stable currency and boost investor confidence in the economy,” Accra-based Dortis Research analyst Joseph Biggles Amponsah said.


The Ugandan shilling is seen trading in a stable range in the coming days as commercial banks start to cool their appetite for hard currency after building comfortable positions in recent days.

At 0938 GMT commercial banks quoted the shilling at 3,630/3,640, weaker than last Thursday’s close of 3,620/3,630.

A trader at a leading commercial bank said most banks had taken positions from a recent wave of demand and are “likely to see most stay on the (market) sidelines in the coming days.”

He said the local currency would likely trade in the 3,610-3,650 range.


The Tanzanian shilling is seen remaining in a similar range to last week in the coming week, with scope for marginal losses on the back of demand for dollars from oil and trading companies.

Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, stronger than 2,235/2,245 a week ago.

“Demand for dollars from oil and trading sectors has picked up over the past few days, but we expect the shilling to hold steady in the days ahead or it could weaken slightly,” a Commercial Bank of Africa Tanzania trader said. (Reporting by Chris Mfula, Kwasi Kpodo, Oludare Mayowa, John Ndiso, Elias Biryabarema,; Writing by Tanisha Heiberg; Editing by Louise Ireland)


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