The new naira notes
Nigeria’s currency could build on this week’s gains in the next week to Thursday, while those of Ghana and Zambia may fall, and Kenya’s and Uganda’s should be little changed, traders said.
NIGERIA
Nigeria’s naira could extend gains into the coming week thanks to dollar supply from foreign investors, exporters and oil companies while demand is moderate.
The naira was quoted at 1,356 to the U.S. currency on the official market on Thursday, compared with 1,374 a week earlier.
The currency was changing hands at 1,404 to the dollar in street trading .
“We may see further rally,” one trader said. “Yields are still attractive for foreign investors, so we should still see more (FX) flows coming to Nigeria,” the trader added.
KENYA
Kenya’s shilling is expected to remain steady in the coming days.
Commercial banks quoted the shilling at 129.20/25 per dollar, compared with last Thursday’s close of 129.10/30.
Traders said the central bank was selling dollars to support the currency when the U.S.-Israeli war against Iran started in late February but that more recently the bank had been buying dollars to boost its reserves.
GHANA
Ghana’s cedi is seen trading with a weakening bias due to significant corporate foreign-currency demand on the interbank market driven by energy and manufacturing companies.
LSEG data showed the cedi trading at 11.24 to the dollar compared with 11.19 a week earlier.
“The cedi is likely to remain on the back foot against the dollar,” a trader said.
“Despite increased allocations from recent central bank FX auctions, demand remains firm and backlogs persist, led primarily by the energy sector as global oil prices remain elevated,” the trader continued.
Another trader said the local unit would continue to face headwinds in the short term as FX liquidity remained thin and the market was struggling to fill unmet demand from central bank auctions.
UGANDA
Uganda’s shilling is likely to be broadly stable ahead of the central bank’s monetary policy committee meeting next week.
Commercial banks quoted the shilling at 3,750/3,760 to the dollar, compared to last Thursday’s close of 3,755/3,765.
The Bank of Uganda is due to announce its next interest rate decision on May 14.
“Most players will be holding their cards ahead of the meeting, … activity will be limited,” said a trader, who added that the unit was likely to oscillate in the 3,740-3,770 range against the dollar in the coming days.
On Thursday commercial banks quoted the kwacha at 19.19 per dollar from 18.99 a week earlier.
“Demand for dollars, mainly driven by energy-related imports, remains higher than supply,” a financial analyst said.
REUTERS
