Nigeria’s naira will likely weaken to the dollar on the parallel market next week due to an anticipated increase of naira liquidity from the government, while greenback sales could strengthen the Zambian kwacha.
NIGERIA
The naira is seen falling marginally on the parallel market in anticipation of rising naira liquidity from budgetary allocations to government agencies, but will remain unchanged on the official interbank market.
Africa’s biggest economy distributes revenues from oil exports among its three tiers of government on a monthly basis, while President Muhammadu Buhari is expected to begin the implementation of the 2016 budget any time from now.
The local currency fell marginally to 323 a dollar on Thursday compared with 320 to the dollar on the parallel market last week, while at the official window the currency was trading at 198.90 to the dollar around the peg rate.
“We anticipate a rise in government spending in the coming weeks and this could put the forex market under pressure and a slight depreciation in the naira is expected,” one currency trader said.
ZAMBIA
The kwacha is expected to remain firm versus the greenback due to dollar sales by companies preparing to pay taxes due in the local currency.
At 0944 GMT, the currency of Africa’s second-biggest copper producer was quoted at 9.1900 per dollar, stronger than a close of 9.8500 a week ago.
“We expect the local unit to continue outperforming as corporates convert (dollars) to meet mid-month tax obligations,” analysts at Atlas Mara’s Zambian branch, BancABC said in a note.
GHANA
Ghana’s cedi is seen fairly steady on muted economic activity as investors gauge the policy direction of new central bank governor Abdul-Nashiru Issahaku.
The local unit has remained firm on renewed investor confidence since the central bank began financing of the government’s budget deficit this year to support fiscal stability. The cedi was quoted at 3.8300 at noon on Thursday, compared to 3.8290 last week.
“We expect the pair (USD/GHS) to remain within the current range… partly as a result of slowdown in economic activity and a no-hurry-to-buy attitude from investors and local businesses,” said Biggles Amponsah of Accra-based Dortis Research.
Issahaku told Reuters his top priorities were to fight inflation and pursue growth of local businesses.
UGANDA
The shilling is forecast to trade in a narrow range in the coming days, helped in part by a slump in importer appetite for hard currency.
At 0945 GMT commercial banks quoted the shilling at 3,340/3,350, stronger than last Thursday’s close of 3,355/3,365. Traders say the shilling will likely play in the 3,325-3,385 range over the coming week.
KENYA
The shilling is expected to trade in a narrow band of 100.70-101.50 as the market weighs the impact of recent liquidity constraints in the banking sector.
The shilling traded around 101.10/20 per dollar slightly up from 101.30/40 last week. The central bank on Sunday pledged to offer liquidity to any lender in need and has pumped shillings into the market with reverse repos in recent days.
TANZANIA
The shilling is expected to hold steady and could appreciate slightly towards the end of the month, helped by a slowdown in demand for the U.S. currency from the oil sector.
At 1210 GMT Commercial banks quoted the shilling at 2,190/2,195 to the dollar, weaker than 2,182/2,192 a week ago.
Mohamed Laseko, a dealer at CRDB Bank said the shilling will remain trading around 2,190-2,195 level until the week after next “when it might start to strengthen due to month-end inflows.”
Reuters
