Kenya’s and Uganda’s currencies are expected to remain stable in the coming week. Zambia’s is expected to be under pressure versus the U.S. dollar.
NIGERIA
Nigerian naira is seen firmer on the black market in the coming week, traders said, supported by a series of central bank actions to try to prop up the currency which eased this week to a 3-1/2 year low of 500 to the dollar on unofficial market.
The naira traded at 470 per dollar on Thursday, recovering from the low it touched this week, after the central bank eased rules on diaspora remittances.
On Monday, the central bank weakened the naira to 390 per dollar for exchange bureaux mostly patronised by individuals, in an attempt to ease pressure on the currency, which has hit new lows on the black market as dollar scarcity squeezes the economy.
KENYA
The Kenyan shilling KES= is expected to be stable in the week ahead, with the central bank likely to step in and pump in dollars should the currency come under too much pressure from importers.
The shilling was trading at 110.70/90 on Thursday, down from 109.95/110.15 at the close of trading last Thursday.
It was expected to trade in a range of 109.00-111.00 against the dollar in the week ahead, traders said, with the central bank expected to offer support by pumping in dollars should demand pressure spark extreme volatility.
ZAMBIA
The kwacha ZMW= is likely to continue trading down against the dollar next week due to limited hard-currency inflows.
On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 21.0100 per dollar from a close of 20.9700 a week ago.
“Negative sentiment after Zambia’s default is constraining dollar inflows and this has largely affected the performance of the kwacha,” one commercial bank trader said.
Zambia missed payment of a $42.5 million coupon on one of its dollar-denominated sovereign bonds last month, becoming Africa’s first pandemic-era sovereign default.
UGANDA
The Uganda shilling UGX= is seen trading in a stable manner with dollar demand ebbing as most merchandise importers have already met their hard currency needs to pay for shipments of goods for holiday shoppers.
At 1121 GMT commercial banks quoted the shilling at 3,680/3,690, compared with last Thursday’s close of 3,695/3,705.
“Most merchandise importers who needed dollars to ship in large volumes for holiday shoppers have already met their needs,” said a trader at one commercial bank. “So I would expect demand side to be quiet.”
He said the shilling was likely to swing in the 3,680-3,700 range.
TANZANIA
Tanzania’s shilling TZS= is likely to hold steady in the next week as inflows from tourism are expected to match demand for the U.S. dollar from energy and manufacturing importers.
Commercial banks quoted the shilling at 2,314/2,324 on Thursday, unchanged from the levels recorded a week earlier.
“The shilling will continue to be stable,” said an FX trader at one of the commercial banks in Dar es Salaam.
“We expect some inflows from tourism and these levels are likely to remain the same for sometime, probably until January 2021 because we are heading to the holiday season.”
– Reuters