Nigeria’s naira and Tanzania’s shilling are expected to hold steady, with the Kenyan shilling seen firming in the coming week, traders said.
Nigeria’s naira is expected to remain around its present range after it crossed the 500 per dollar mark early this week as investors look ahead of a $1 billion eurobond issue expected to boost support for the naira, traders said.
Traders said the naira was quoted at 500 to the dollar on the black market, a notch weaker than 498 a dollar last week, and quoted at 305.25 a dollar on the official interbank window, the same level it has closed since August last year.
“The naira is not likely to fall further in the near term on the black market because of possible resistance of buyers and confidence boosting provided by the rising forex reserves and planned Eurobond issuance,” one senior currency trader said. ($1 = 314.0000 naira)
The Kenyan shilling is expected to strengthen in the week ahead due to importer demand being subdued by foreign exchange inflows from charities and remittances, traders said.
At 1140 GMT, commercial banks quoted the shilling at 103.45/65 to the dollar, versus 103.80/90 at last Thursday’s close.
“Demand remains subdued…we have seen supply from NGOs and diaspora sending money home pick up in the month of February,” said a trader from a commercial bank.
The Tanzanian shilling is expected to be range bound over the next week due to low dollar demand.
Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, unchanged from a week ago.
“There is somewhat of a balance right now between demand and supply for dollars in the market, so the outlook is that of stability,” said Moses Kawiche, a trader at CRDB Bank.
The Ugandan shilling is forecast to remain stable as traders wait for a central bank rate decision on Wednesday.
At 0955 GMT commercial banks quoted the currency at 3,578/3,588, against last Thursday’s close of 3,580/3,590.
Benon Okwenje, trader at Stanbic bank, said the shilling will likely oscillate between 3,575-3,595 with traders cautious on taking position ahead of the rate decision. Bank of Uganda last changed its policy rate in December, when it cut it to 12 percent from 13 percent.
Ghana’s often volatile cedi is expected to remain flat next week on mixed market sentiments over the sustainability of a fortnightly central bank dollar auction.
The cedi, under pressure since mid-January, steadied on Wednesday after the central bank auctioned dollars to boost forex liquidly. It was trading at 4.4100 to the greenback at mid-morning in Thursday compared to 4.3850 last week.
“We expect the cedi to remain flat under the current pressure on mixed market sentiments,” Joseph Biggles Amponsah, analyst at the Accra-based Dortis research said.
The kwacha is likely to remain firm, supported by an inflow of dollars from offshore players looking to invest in government securities.
At 0913 GMT on Thursday, the currency of Africa’s No.2 copper producer was quoted at 9.8100 per dollar from 9.8400 a week ago, according to Thomson Reuters data.
“We have a Treasury Bill issue next week on Thursday and the following week on February 24 the central bank is having a bond auction. These events should attract dollar inflows,” one commercial bank trader said.