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WEEKAHEAD-Nigeria’s naira is seen steady in the coming days – Reuters

HomeNewsWEEKAHEAD-Nigeria’s naira is seen steady in the coming days – Reuters
WEEKAHEAD-Nigeria’s naira is seen steady in the coming days – Reuters
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ACCRA, March 2 (Reuters) – Ghana’s cedi could be affected by how markets receive the new government’s first budget presented on Thursday, while the Ugandan shilling will likely weaken on increased dollar demand from manufacturers and fuel importers.


Ghana’s volatile cedi has been under pressure since early February on a persisting strong corporate greenback demand, touching record lows this week, but it’s next moves could be determined by it’s annual budget.

It was trading at 4.7400 per dollar by on Thursday compared to 4.5850 last week, and down around 11 percent since January.

“If the budget restores confidence then we are likely to see foreign investors show interest in cedi investments once again, and this could go a long way to firm up the currency,” Joseph Biggles Amponsah, analyst at the Accra-based Dortis Research said.


The Ugandan shilling is seen weakening due to dollar demand by importers. Commercial banks quoted the shilling at 3,590/3,600, weaker than last Wednesday’s close of 3,580/3,590.

“Dollar demand is showing signs of picking up again, especially from oil importers and manufacturers,” said David Bagambe, a trader at Diamond Trust Bank Uganda.


Nigeria’s naira is seen steady in the coming days after the currency responded to central bank’s measure to close the gap between official and parallel market rates led to sharp appreciation of the naira.

Last week, central bank started systematic injections of dollars to cater for the needs of private individuals and some corporations in a move to ease pressure on the local currency.

The unit traded at 305.25 to the dollar on Thursday on the official market, same level it has traded since August. It traded at 455 per dollar on the black market on the day versus 505 last Thursday.

The naira gained 2.2 percent to 450 per dollar on the black market on Tuesday, a more than four-month high, a day after the central bank sold dollars on the interbank market to increase dollar liquidity and support the naira.


The kwacha is expected to remain on the front foot next week supported by increased dollar inflows into Africa’s second-biggest copper producer.

At 1118 GMT, commercial banks quoted the kwacha at 9.6500 per dollar from a close of 9.5900 a week ago.

“The Kwacha is expected to continue its recent bullish run against the dollar as hard currency inflows appear to outweigh consumer green-back demand,” Zambia National Commercial Bank said in a note.


The Kenyan shilling is seen strengthening due to foreign exchange inflows from portfolio investors interested in buying government bonds.

Commercial banks quoted the shilling at 102.70/90 to the dollar, compared with 103.40/60 at last Thursday’s close.

“The bonds are denominated in shillings and the investors are selling dollars in order to buy the shilling and that supply of dollars is making the shilling strengthen,” said a trader from a commercial bank.


The Tanzanian shilling is expected to hold firm against the dollar in the coming days, buoyed by a slowdown in business activity.

Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, barely moved from 2,235/2,240 a week ago.

“The outlook is stable… nothing much is happening in the market on both the demand and supply sides. Business is very slow,” said a trader at a commercial bank. (Reporting by Kwasi Kpodo, Elias Biryabarema, Oludare Mayowa, Chris Mfula, John Ndiso, Fumbuka Ng’wanakilala; Compiled by Tanisha Heiberg; Editing by James Macharia)


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