Nigeria’s naira will likely hold ground across its multiple exchange rates next week as the central bank continues to intervene on the official market to boost dollar liquidity, traders say.
The local currency has traded at around 360 per dollar for investors with a volume of almost $600 million this week.
Traders say the central bank has been selling around $100 million weekly for wholesale dollar demand and also a separate amount twice weekly for retail needs.
On the official market, where the central bank has been selling $500,000 daily to lenders, the naira firmed slightly to 305.55 per dollar at 1500 GMT.
The Kenya shilling could depreciate in the coming week due to growing political uncertainty – though horticulture earnings and direct intervention from the central bank will likely offer some support, traders said.
At 1500 GMT, commercial banks quoted the shilling at 103.15/350 per dollar, compared with 103.25/45 at last Thursday’s close.
“Because of political uncertainty, strategies have changed and the shilling looks more vulnerable,” said a senior trader from a commercial bank.
The Ugandan shilling is seen trading mostly stable in the coming days amid weak demand as firms reserve their local currency holdings for mid-month tax payments.
At 1500 GMT commercial banks quoted the shilling at 3,632/3,642, weaker than last Thursday’s close of 3,605/3,615.
“We’ll see (dollar) demand easing off as firms prepare for tax payments,” said Faisal Bukenya, head of treasury at Exim Bank Uganda.
The kwacha will likely to trade on the back foot in the coming week due to scant dollar supply and increasing hard currency demand before the festive season.
At 1500 GMT on Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.6500 per dollar, marginally weaker that last week’s close of 9.6300.
“We are likely to see the kwacha come under a bit of pressure due to limited dollar inflows and rising demand,” independent financial analyst Maambo Hamaundu said.
Ghana’s cedi is expected to firm against the dollar next week on improved forex liquidity inflows amid waning corporate demand, an analyst said.
The cedi which closed September at 4.4100 to the dollar, has recorded marginal gains this week, and at 1500 GMT was trading at 4.3811 to the greenback on Thursday, compared to 4.4000 a week ago.
“We expect a further boost in forex liquidity in the weeks ahead on the shoulders of offshore investor interest in government bonds,” Joseph Biggles Amponsah of the Accra-based Dortis Research said.
The Tanzanian shilling is seen holding steady against the dollar in the days ahead, but could weaken if there is a spike in demand for the U.S. currency from oil importers. Commercial banks quoted the shilling at 2,240/2,250 to the dollar on Thursday at 1500 GMT, barely moved from the close of 2,246/2,250 a week ago.
“There is a match in demand and supply for dollars, thanks to inflows from tourism and mining companies. The outlook for the shilling next week is that of stability, with a bias on weakness if we see a surge in demand for dollars,” said a trader at CRDB Bank. (Reporting bby Elias Biryabarema, Chris Mfula, Chijioke Ohuocha, Kwasi Kpodo, John Ndiso and Fumbuka Ng‘wanakilala; Compiled by Mfuneko Toyana)