Aug 3 (Reuters) Nigerian naira is seen stable in the coming week as the central bank sustains its intervention in foreign exchange market.
The local currency is quoted at 365 to the dollar on the black market on Thursday, unchanged from last week’s level while the currency issue stuck at 305.90 to the dollar on the official interbank market.
“The market has been quiet for sometime now because of the increased dollar supply from the central bank and offshore investors and it will remain stable in the near term,” Nigerian central bank has been intervening in the forex market since February in a bid to ease pressure on the local currency.
OTHER AFRICAN CURRENCIES
– The Zambian kwacha is expected to firm next week on increasing hard currency inflows, while the Kenyan shilling is likely to remain steady as the central bank intervenes to smooth out price volatility.
The Zambian kwacha is likely to firm versus the dollar next week due to increasing hard currency supply ahead of an expected cut of the benchmark lending rate by the nation’s central bank.
At 0751 GMT on Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 9.0100 per dollar from a close of 8.8100 a week ago.
“Consensus is building that the monetary policy rate will be cut next week. A cut will boost asset values and create demand for the local unit,” the Zambian branch of South Africa’s First National Bank (FNB) said in a note.
On May 17, Zambia’s central bank cut its benchmark lending rate by 150 basis point to 12.5 percent and is due to announce a new policy rate on Thursday next week.
The Kenyan shilling is expected to hold steady against the dollar in the coming week with central bank intervention likely to smooth out price volatility ahead of general elections on Tuesday, traders said.
At 0817 GMT, commercial banks quoted the shilling at 103.80/104.00 per dollar, the same as last Thursday’s close.
“Although we expected some capital flight ahead of elections, that is not happening… the regulator has just enough to cushion the shilling,” said a trader from a commercial bank.
The Ugandan shilling is forecast to trade in a stable range, though with a weakening bias as dollar demand from manufacturing and energy players exert moderate pressure.
At 0932 GMT, commercial banks quoted the shilling at 3,610/3,620, weaker than last Thursday’s close of 3,595/3,605.
A trader at a leading commercial bank said demand from manufacturing and energy importers was expected to remain elevated over the coming week. The local currency would oscillate between 3,605-3,625 against the greenback, he said.
The cedi is expected to remain stable next week on regular central bank dollar sales to balance interbank demand analysts said.
The local unit was trading at 4.3854 to the dollar by mid-day on Thursday, up from 4.4050 a week ago.
“We expect the currency to maintain its current stability on flows from the central bank as investor confidence in the economy gradually returns,” Chris Fiagbe, a currency analyst said.
The Tanzanian shilling’s outlook remains stable in the near term, helped by dollar inflows from tourism and agriculture sectors and subdued dollar demand from importers.
On Thursday, commercial banks quoted the shilling at 2,234/2,244 to the dollar, unchanged from a week ago.
“Demand for dollars is being matched by supply at the moment, so the outlook for next week is that of continued stability,” said a trader in one of Tanzania’s largest banks. (Reporting by Chris Mfula, John Ndiso, Elias Biryabarema, Oludare Mayowa, Kwasi Kpodo and Fumbuka Ng’wanakilala; Compiled by Olwethu Boso, editing by Pritha Sarkar)