Major African currencies are expected to come under pressure next week due to low foreign exchange supplies and lingering concerns about global economic growth, traders said.
NIGERIA
The Nigerian naira is seen easing slightly against the dollar on the parallel market in the coming days as the central bank moves to release details of its new flexible exchange rate policy.
The local currency was quoted at 368 to the dollar on the black market on Friday, compared with 350 last week. The naira was trading at 197.50 a dollar on the official interbank market, around the peg rate of 197.
The head of United Bank for Africa (UBA) Philips Oduoza said on Thursday details of Nigeria’s flexible currency model will be ready in a “short while”, after chief executives of the country’s lenders met with central bank officials.
The announcement halted the free fall of the naira, while many traders expecting that the announcement of the detail would spur the alignment of the parallel market rate and the official window.
KENYA
The Kenyan shilling was expected to weaken next week because of emerging demand for dollars from energy and telecommunications firms, traders said.
They said the shilling was likely to slip to between 101.50 and 102.20 to the dollar.
At 1004 GMT, commercial banks quoted the shilling at 101.05/25 compared with 100.90/101.00 at Thursday’s close.
UGANDA
The Ugandan shilling was seen weakening over the coming days, with a government anouncement of a cut back in planned domestic borrowing fuelling hopes of better credit flow to the private sector and an uptick in dollar purchases.
At market close on Wednesday commercial banks quoted the shilling at 3,345/3,355, stronger than last Thursday’s close of 3,355/3,365. Markets were closed in Uganda on Thursday as it was a national holiday.
In a budget speech on Wednesday, finance minister Matia Kasaija said the government would borrow 612 billion Ugandan shillings in the 2016/2017 (July-June) fiscal year, down from 1.4 trillion shillings in the previous period.
GHANA
Ghana’s cedi could remain under pressure next week on unmet dollar demand from local importers, an analyst said.
The local unit, which has been under pressure this month, opened Thursday’s trading at 3.9275 to the dollar, compared to 3.8900 last week.
“The cedi is expected to be on the back foot in the week ahead on growing demand for the greenback,” analyst Joseph Biggles Amponsah of the Accra-based Dortis Research said. He projected that the dollar-cedi rate could breach 3.95 levels.
ZAMBIA
The kwacha is expected to remain under pressure versus the U.S dollar next week due to limited dollar inflows.
At 1254 GMT, the kwacha was trading at 10.7550 per dollar, softer than a close of 10.5000 a week ago.
“Supply (of dollars) has been thin going for extended periods with no major inflows,” the Zambian branch of South Africa’s First National Bank (FNB) said in a note.
Reuters
