The currencies of Kenya, Zambia and Nigeria are expected to come under pressure versus the U.S. dollar next week, according to traders, while Tanzania’s and Uganda’s hold steady.
NIGERIA
The naira NGN= is expected to be weaker on the black market in the week ahead, traders said on Thursday, as central bank policies restrict access to the official window, thereby funnelling demand to the parallel market that holds less than 5% of trades.
The naira was quoted at 487 per dollar on the black market on Thursday, a level it touched previous day. The currency was quoted on the official market at 381 per dollar, a level it has been at since July.
Central Bank Governor Godwin Emefiele responded on Tuesday to calls for further depreciation of the naira, which has weakened by 28% this year, by saying the black market rate should not be used to determine the naira’s value.
The naira traded at 388.50 on the over-the-counter spot market NAFEX=FMDQ, quoted by investors and importers, on thin volumes.
KENYA
Kenya’s shilling KES= is expected to continue to weaken against the dollar on the back of demand from importers across all sectors and slow inflows from horticulture and agriculture exporters and remittances.
Commercial banks quoted the shilling at 109.95/110.15 to the dollar, compared with last Thursday’s close of 109.75/109.95.
“Demand will continue from importers until the end of the month impacting the shilling due to end of month obligations,” said a trader at one commercial bank.
ZAMBIA
The kwacha ZMW= will likely remain weak versus the dollar next week as demand for hard currency continues to exceed supply.
On Thursday, commercial banks quoted the currency of Zambia, one of the world’s largest copper producers, at 20.9700 per dollar from a close of 20.9204 a week ago.
“The local unit is still expected to remain bearish as demand continues to outweigh supply,” one commercial bank trader said.
TANZANIA
Tanzania’s shilling TZS= is expected to hold steady versus the dollar as inflows from agricultural exports offset pressure on the currency from demand for manufacturing and energy imports.
Commercial banks quoted the shilling at 2,314/24 on Thursday, the same levels recorded at last week’s close.
“We expect FX (foreign exchange) inflows from cashews and other farming products to continue supporting the shilling,” a trader at one of the FX trading firms said.
UGANDA
The Ugandan shilling UGX= is seen in a stable range against the dollar in the coming days, underpinned by some inflows from coffee exporters.
At 1001 GMT commercial banks quoted the shilling at 3,695/3,705, compared to last Thursday’s close of 3,700/3,710.
“We have been receiving some healthy flows from coffee exporters, which I think will continue, as the season is on,” said a trader at one of the commercial banks.
– Reuters