WEEKAHEAD-AFRICA-FX: Nigeria’s Naira, Most African currencies seen firm

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A gas station attendant displays a large bundle of naira banknotes after selling fuel to a customer in Port Harcourt, Nigeria, on Friday, Jan. 15, 2016. With his security forces engaged in fighting Boko Haram's Islamist insurgency in the north, President Muhammadu Buhari can't afford renewed rebellion in the delta. Photographer: George Osodi/Bloomberg

LUSAKA, Dec 12 (Reuters) – Zambian, Tanzanian and Ugandan currencies are expected to firm next week while Nigeria’s should remain stable.
ZAMBIA

The kwacha is likely to hold firm after the central bank raised the statutory reserve ratio for commercial banks and asked them to maintain statutory reserve requirements on a daily rather than weekly basis.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 14.3800 per dollar, up from a close of 15.1000 a week ago.

“The kwacha should continue trading within the current levels owing to the monetary policy pronouncements by the central bank,” independent financial analyst Maambo Hamaundu said.

On Monday, Zambia’s central bank announced that the statutory reserve ratio for commercial banks would be increased to 9% from 5% from Dec. 23 and directed banks to immediately start maintaining statutory reserve requirements on a daily basis.
TANZANIA

Tanzania’s shilling is expected to slightly appreciate next week due to reduced activities in the market and month-end dollar sales to meet local currency obligations.

Commercial banks quoted the shilling at 2,293/2,303 on Thursday, the same levels as a week earlier.

“Corporates will be buying the shilling next week to meet their end-month obligations such as tax and salaries before going for holidays,” a trader at one commercial bank in Dar es Salaam said.
UGANDA

The Ugandan shilling is seen strengthening over the next one week on the back of inflows from charities and remittances from Ugandans working abroad.

Commercial banks quoted the shilling at 3,668/3,678, compared with last Thursday’s close of 3,680/3,690.

A trader at a leading commercial bank said the shilling would draw some support from conversions by non-governmental organisations (NGOs) to meet outstanding obligations for the year and also remittances.

“This is around the time we tend to see large volumes of inflows from these two sources,” he said, adding he forecast the shilling to trade in the 3,650-3,680 range over the next week.
NIGERIA

Nigeria’s naira is seen stable next week supported by the central bank after it weakened on the over-the-counter market as investors repatriated dividends and profits from the bond market, traders said.

The naira eased as low as 364 to the dollar this week before firming to trade at a range of between 363 and 363.50. The currency had been quoted at a range of 362-362.50 last week.

The currency was quoted at 306.95 on the official market, supported by the central bank. Nigeria operates a multiple currency regime.

“We are seeing offshore outflows and not much is coming back in,” one trader said. “I expect that to continue next week. If there is no anchor, the currency could weaken.” (Reporting by Chris Mfula, Nuzulack Dausen, Elias Biryabarema and Chijioke Ohuocha; Compiled by Chris Mfula; Editing by Nick Macfie)

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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