Nigeria’s naira, Ghanaian cedi set to steady in the coming week as regulators step in to meet forex shortages, while a weaker dollar is seen boosting other African currencies.
Nigeria’s naira is expected to trade within a recent range after the central bank released around $660 million to quench greenback shortages in Africa’s biggest economy.
The naira was quoted at 498 to the dollar on the parallel market, the same as last week, while banks quoted the currency at 314.50/dollar on the official interbank window.
The unit is seen closing around 305 to the dollar, the same level it has traded at since August.
“The pressure on the market has reduced slightly because of the recent dollar sales by the central bank to clear part of the backlog of demand and the regular sales to bureaux de change by Travelex,” one trader said.
On Wednesday, Nigeria sold dollars in a special auction aimed at clearing the backlog of dollar obligations of manufacturers, airlines, the agriculture and petroleum sectors.
Zambia’s kwacha is expected to remain firm, albeit in a narrow range, as demand for the dollar eased significantly while supply ticked up.
“In the days ahead, we expect the kwacha to remain bullish as demand for dollar had significantly eased while we continue to see an improvement on the supply side,” said a currency dealer at one of the commercial banks in the capital Lusaka.
“We expect it to trade next week in the range of 9.84 and 9.90 against the dollar.”
Ghana’s cedi could steady next week on improving dollar sales by the central bank and mining firms to offset persistently high demand for forex from offshore investors, analysts said.
The cedi, under pressure since mid-January, plunged to a record low of 4.3850 per dollar mid-morning on Thursday, after the new government said it inherited undisclosed debt arrears of about $1.6 billion and a budget deficit of around 10 percent.
“There are signs the government is now wary of market sensitivity to its comments and is taking measures to calm the markets,” a currency dealer at a leading bank in Accra said.
“We are also seeing increased forex offers that could help steady the currency in the weeks ahead,” the dealer said.
The Kenyan shilling is expected to trade in a tight range in the week ahead as the market assesses the potential impact of external developments, especially weakness in the U.S. dollar.
At 0920 GMT, commercial banks posted the shilling at 103.80/90, slightly up from 103.85/104.05 last week.
Traders said the shilling would trade in a band of 103.50-104.00.
The Ugandan shilling is expected to remain stable next week amid thin demand from importers and supported by some inflows of foreign exchange from Ugandans working abroad as well as commodity exporters.
At 1107 GMT commercial banks quoted the shilling at 3,580/3,590, little changed from last Wednesday’s close of 3,585/3,595.
Last Thursday markets were closed in Uganda for a public holiday.
“Importer appetite is pretty flat but on the other hand some flows are coming in from commodity exporters. Some remittances are also trickling in,” said David Bagambe, a trader at Diamond Trust Bank.
Bagambe added that the shilling would likely hover between 3,575 and 3,625.
The Tanzanian shilling is seen trading in a stable range next week, amid slack demand for dollars.
Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, weaker than 2,225/2,235 a week ago.
“We expect the shilling to be fairly stable next week due to the prevailing sluggish demand for dollars and support from the central bank,” said a trader at a commercial bank.
“However, it could weaken if we get strong demand for dollars,” the trader said.