WEEKAHEAD-AFRICA-FX: Naira Expected to Stabilise as Uganda Shilling seen Weaken

Nigeria’s naira and Kenya’s shilling are seen holding steady, traders said as The Zambian Kwacha is seen firming against the dollar in the next week to Thursday, while

NIGERIA

The naira is expected to stabilise on the parallel market after International Money transfer agencies started selling dollars to bureau de change operators in line with a central bank directive.

“We have started receiving dollar supply from Travelex and we expect this to gradually impact positively on the naira exchange rate going forward,” Aminu Gwadabe the head of Nigeria’s bureaux de change association, told Reuters, referring to one transfer agency.

The naira was quoted at 473 to the dollar on the black market on Thursday compared with 460 last week. It was trading at 310.50 on the official interbank market at 1117GMT, it usually closed around 305.5 after central bank intervention toward the close of the trading.

KENYA

The Kenyan shilling is expected to remain stable in the coming week although dollar sales from multi-national companies buying shillings to pay tax obligations could offer a boost, traders said.

At 1100 GMT, commercial banks quoted the shilling at 101.15/35 to the dollar, compared with 101.25/35 at last Thursday’s close.

“I expect corporates will be selling dollars in advance of tax dues,” said a trader from one commercial bank.

UGANDA

The Ugandan shilling is forecast to trade on a weaker footing as commercial banks rush to buy dollars in anticipation of further weakening of the local currency due to demand from energy and manufacturing companies.

At 1159 GMT commercial banks quoted the shilling at 3,408/3,418, weaker than last Thursday’s close of 3,380/3,390.

A trader at one leading commercial bank said “banks will be rushing to expand positions because they don’t want to be caught short.”

TANZANIA

The Tanzanian shilling is expected to hold steady in the days ahead, helped by subdued demand for dollars from importers.

Commercial banks quoted the shilling at 2,178/2,188 to the dollar on Thursday, weaker than 2,175/2,185 a week ago.

“I do not see any significant movement in the market over the coming week. The shilling is anticipated to trade in the same levels going forward,” said Francis William, a dealer at Commercial Bank of Africa Tanzania.

ZAMBIA

The kwacha is likely to remain firm next week due to conversions of hard currency by companies preparing to pay taxes that are due in the local unit on Oct. 14.

At 1117 GMT, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.8900 per dollar from 9.8000 a week ago.

“The Kwacha is expected to continue trading with a bullish tone against the dollar on the back of strong corporate and interbank inflows. Trading range is expected to be between K9.800 and K9.850 in the near term,” Zambia National Commercial Bank (ZANACO) said in a note.

 

 

Reporting by John Ndiso, Oludare Mayowa, Chris Mfula,Elias Biryabarema and Fumbuka Ng’wanakilala; Compiled by George Obulutsa; Editing by Alexandra

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