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WEEKAHEAD- Nigeria’s naira to strengthen, Kenyan shilling seen stable – Reuters

HomeNewsWEEKAHEAD- Nigeria’s naira to strengthen, Kenyan shilling seen stable – Reuters
WEEKAHEAD- Nigeria’s naira to strengthen, Kenyan shilling seen stable – Reuters
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    Alex Ikechukwu
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NAIROBI, March 23 (Reuters) – The Kenyan shilling is expected to remain stable over the next week, with importer demand for dollars set to outweigh inflows, while Nigeria’s naira is likely to strengthen further in the black market on the back of central bank interventions.


The Kenyan shilling is expected to remain stable or weaken slightly in the next week, mainly owing to importer demand for dollars outweighing inflows from farm exports.

At 1200 GMT commercial banks posted the shilling at 102.70/90, slightly up from last Thursday’s close of 102.95/103.05.

Market participants said there was no consensus on what policymakers are likely to do when they meet to set interest rates on March 27.


The Tanzanian shilling is seen trading in a tight range against the dollar, helped by a slowdown in demand for the U.S. currency.

Commercial banks quoted the shilling at 2,228/2,238 to the dollar on Thursday, stronger than the 2,235/2,240 a week ago.

“The shilling will likely remain range-bound next week due to subdued business activity. Demand and supply of dollars are largely matching each other at the moment,” said a trader at a commercial bank.


The Nigerian naira is expected to strengthen further in the black market in the coming days with the central bank intervening in the foreign exchange market to narrow the gap between the official and parallel market rates. The naira strengthened to 400 to the dollar on the black market on Thursday, from 457 last week. On the official interbank market the naira closed at 308 to the dollar, against 306 a week ago.

“We see the exchange rate converging at some point between 380-400 naira to the dollar in the near term because of the determination of the central bank to increase dollar supply,” said Aminu Gwadabe, head of Nigeria’s exchange bureaus.

Nigeria’s central bank plans to sell $100 million in currency forwards on Thursday to be delivered within the next 60 days.


The Ugandan shilling is seen weakening moderately in the days ahead, weighed down by a typical surge in appetite for hard currency from manufacturers towards month-end.

At 1126 GMT commercial banks quoted the shilling at 3,590/3,600 to the dollar, the same level as last Thursday’s close.

“We could see some slight movement on the upper side (weakening) from the usual month-end demand,” said Benon Okwenje, trader at Stanbic Bank.


Ghana’s cedi is expected to remain bullish next week, bolstered by strong forex liquidity inflows amid weakening dollar demand, analysts said.

After touching record lows of 4.742 to the dollar this month, the cedi has rallied steadily to reach 4.40 by mid-morning on Thursday, compared to 4.56 a week ago. It is down about 4 percent since January, Reuters data shows.

“We expect a sustained bullish cedi in the face of comparatively weaker demand for the greenback amidst sufficient forex supply,” said Joseph Biggles Amponsah, analyst at Accra-based Dortis Research.

“However, to extend this gain into the next quarter, the supply of dollars to the market needs to be sustained.”


The kwacha is expected to hold firm against the dollar next week because of hard currency conversions by companies preparing to pay salaries and other month-end obligations.

At 0901 GMT on Thursday commercial banks quoted the currency of Africa’s No.2 copper producer at 9.50 per dollar, the same as its closing level a week ago.

“The kwacha is expected to maintain a narrow trading range fluctuating between K9.4800 and K9.5800 in the near term,” Zambia National Commercial Bank (ZANACO) said in a note. (Reporting by John Ndiso, Fumbuka Ng’wanakilala, Oludare Mayowa, Elias Biryabarema, Kwasi Kpodo, Chris Mfula; Compiled by Aaron Maasho; Editing by David Goodman)


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