WEEKAHEAD-AFRICA-FX-Ugandan Currency Firm, Kenya’s, Zambia’s Stable, Nigerian Rangebound

Uganda’s currency will likely gain against the U.S. dollar next week, while Kenya’s and Zambia’s are expected to be stable and Nigeria’s Naira rangebound.

NIGERIA
The naira NGN is seen trading within a range next week across markets after the currency received a boost from the central bank’s easing of restrictions on diaspora remittances.

The naira firmed to 476 per dollar on the black market on Thursday from 478 previous session and recovering from a 3-1/2 year low of 500 naira it hit last week on the unofficial market, where the currency trades freely.

The currency was quoted at 381 per dollar on the official market, a level set by the central bank in July. The naira sold at 392.79 on the over-the-counter spot market NAFEX=FMDQ, quoted by investors and importers, in thin trade.

The World Bank said on Thursday that Nigeria’s steps to unify its multiple exchange rates have not been enough, adding that remittances this year were likely to fall to 2015 levels of $20.2 billion from $26.4 billion last year.

UGANDA
The Ugandan shilling UGX= is seen firmer as big importers, such as the manufacturing sector, slow activities ahead of the year-end.

At 0820 GMT commercial banks quoted the shilling at 3,675/3,685, stable from last Thursday’s close.

“We expect to see demand from most big importers thinning out as traditionally happens around this time,” a trader at one of the commercial banks in the capital Kampala said.

As importer appetite slows, he predicted the local currency could post some modest gains.

KENYA
The Kenyan shilling KES= is expected to remain stable in the week ahead, due to low dollar demand as companies close ahead of the festive season.

The shilling was trading at 111.40/111.60 on Thursday, down from 111.10/30 at the end of trading a week earlier.

“Most people are probably closing businesses next week. I suspect we might remain at these levels. Nothing much is expected,” said a trader at one commercial bank.

ZAMBIA
The kwacha ZMW= is likely to hold steady against the dollar, supported by foreign currency conversions by companies preparing to pay taxes due next week.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 21.0450 per dollar from 21.0175 at the close of business a week ago.

“The local unit should continue trading within the current levels because there are various tax payments due next week,” one commercial bank trader said.

– Reuters