AFRICA-FX-Nigerian Naira seen easing, other currencies stable – REUTERS
AUGUST 02, 2018
LAGOS, Aug 2 – The Nigerian currency may come under pressure in the coming week but other African currencies are likely to remain stable.
Nigeria’s naira is likely to ease to 364 per dollar next week due to weak dollar inflows from foreign investors, which has renewed pressure for the local currency, traders said.
The naira traded in a range of 361 to 363 over-the-counter on Thursday, traders said. On the official market the unit was quoted at 305.95, supported by the central bank.
“Foreign investors are not coming in as much and we don’t have funds in the market,” one trader said. “If we don’t have enough supply next week I see rates getting to 364.”
The central bank has been intervening to support the naira but dollar demand is high owing to Nigeria’s reliance on imports for consumption. Last week the bank sold the yuan for imports from China, its latest attempt to curb demand for the dollar.
The Kenyan shilling is expected to remain firm in the coming week due hard currency inflows from offshore investors buying government debt amid thin demand from importers.
Commercial banks quoted the shilling at 100.35/55 per dollar, compared with 100.45/65 at last Thursday’s close.
“We have been trading in a tight band… Tight liquidity should provide support,” said a trader from a commercial bank.
The Uganda shilling is seen trading in a stable range in the coming days as some players offload some of their hard currenyc holdings to cope with a liquidity squeeze.
At 1102 GMT commercial banks quoted the shilling at 3,695/3,705, little-changed from last Thursday’s close of 3,700/3,710.
A trader at a leading commercial bank said there was scattered tightness for local currency in the interbank market.
“If it (tightness) persists it will limit position-taking for some players,” said a trader at a leading commercial. The local currency will hover around 3,700 against the dollar in the coming days.
The kwacha is expcted to continue trading on the front foot next week due to tightened liquidity which has dampened demand for the greenback.
On Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.9200 per dollar from a close of 9.9400 per dollar a week ago.
“We anticipate USD/ZMW to continue trading around current levels,” the local branch of South Africa’s First National Bank (FNB) said in a market note on Thursday.