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WEEKAHEAD-Nigeria’s naira to firm on move, Zambia’s kwacha seen stable – Reuters

HomeNewsWEEKAHEAD-Nigeria’s naira to firm on move, Zambia’s kwacha seen stable – Reuters
WEEKAHEAD-Nigeria’s naira to firm on move, Zambia’s kwacha seen stable – Reuters
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    Alex Ikechukwu
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LAGOS, April 20 (Reuters) – Nigeria’s naira, is expected to post gains over the next week as a central bank move to ease business access to dollars trims demand on the black market, while Zambia’s kwacha is seen supported by salary payments.

NIGERIA The naira is seen strengthening, helped by the central bank’s decision to make it easier for small businesses to purchase dollars from the official window, and potentially cutting demand on the black market.

On Tuesday, the central bank cut the amount of paperwork small and medium-size businesses must provide to buy dollars.

The move was aimed at improving liquidity, cutting hurdles for businesses and helping narrow the gap between official and black market exchange rates.

The naira was quoted at 395 to the dollar on the black market on Thursday, stronger from last Thursday’s 410 per dollar. On the official window it was quoted at 315 a dollar against 306.20 last Thursday.

The Central Bank of Nigeria (CBN) this week increased dollar sales to forex bureau operators to $40,000 each per week from $20,000 each previously, boosting liquidity and helping the naira to gain at the black market.

KENYA The Kenyan shilling is projected to stay under pressure in the coming week due to end-month dollar demand from oil importers, traders said.

At 1010 GMT, commercial banks quoted the shilling at 103.30/50 to the dollar, compared to last Thursday’s close of 103.20/40.

“The shilling will remain under pressure next week as markets prepare for end-month demand,” said a trader from a major commercial bank.


The Ugandan shilling is expected to trade with a strengthening bias, as flat appetite for hard currency from importers forces banks to trim their long positions.

At 1013 GMT commercial banks quoted the shilling at 3,605/3,615, stronger than last Thursday’s close of 3,610/3,620.

A trader from a leading commercial bank said regular hard currency buyers from sectors like telecoms and manufacturers “don’t seem to have much appetite lately … probably because of slow sales.”

This, he said, would spur banks to cut back on their dollar holdings.


The Tanzanian shilling will hold steady in the days ahead, a trader said, on the back of an expected uptick in appetite for dollars toward the end of the month. Commercial banks quoted the shilling at 2,237/2,242 to the dollar on Thursday, little changed from 2,230/2,240 a week ago. “End of month dollar inflows are expected to bring some stability to the local currency next week,” said Mohamed Laseko, a dealer at CRDB Bank.

ZAMBIA The kwacha is seen trading in a firm position as companies convert some of their hard currency holdings in preparation for payment of salaries and other regular end-month obligations. At 1115 GMT on Thursday, the currency of Africa’s No 2 copper producer was quoted at 9.3000 per dollar from a close of 9.4156 a week ago, according to Reuters data.

“There seems to be a fair amount of dollars coming into the market, which are able to sustain the demand for the greenback,” the Zambian branch of South Africa’s First National Bank (FNB) said in a note.


Ghana’s cedi is expected to be stable against the dollar on the back of hard currency inflows into a recent bond auction.

“Though demand for the greenback has been firm in the weeks leading to the Easter break, the inflow of dollars towards the recent bond issue has been more than enough to curtail it,” said Joseph Biggles Amponsah of Dortis Research in Accra.

The cedi touched record lows of 4.720 last month but it has since rebounded, in part due to what Amponsah said was renewed economic confidence following the annual budget speech last month. It stood at 4.1400/4.1600 to the dollar at 1211 GMT on Thursday, according to Thomson Reuters data.

(Reporting by Elias Biryabarema, Chris Mfula,; Oludare Mayowa, Fumbuka Ng’wanakilala,; John Ndiso, Matthew Mpoke Bigg; compiled by Elias Biryabarema Editing by Jeremy Gaunt)


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