NAIROBI: Nigeria's naira is forecast to soften against the dollar in the week to next Thursday, while Kenya's shilling is expected to be stable.
NIGERIA
The naira could weaken slightly next week to 361 as demand for the dollar increases following the maturity of currency forwards and as treasury yields drop, traders said.
The naira traded at 360.50 per dollar on the over-the-counter market for investors on Thursday. It was quoted at 306.45 naira on the official market, supported by the central bank.
Yields on bonds and bills have been dropping this year. They fell further after the central bank cut interest rates by 50 basis points this week.
"The naira market is on bid people are looking to buy the currency below 361," one trader said.
"The currency might weaken slightly. An NDF matured yesterday and people want to exit. With that, demand has increased, especially as people don't want to roll over."
KENYA
The Kenyan shilling is expected to hold steady as inflows from government debt purchases by offshore investors are offset by demand from multinational companies buying dollars to pay dividends.
Commercial banks quoted the shilling at 100.70/90 per dollar, compared with 100.65/85 at last Thursday's close.
"Given foreign domination of the stock market, we expect there is some dollar demand to pay their dividends ... coupled with foreign interest in 10-year and 15-year bonds," said a senior trader at one commercial bank.
TANZANIA
The Tanzanian Shilling is also expected to remain stable as companies sell dollars to pay local currency-denominated obligations like salaries.
Commercial banks quoted the shilling at 2,320/2,330 per dollar, compared with 2,335/2,345 at last Thursday's close.
"We expect the currency will remain stable next week within the same levels of 2,320/30," a trader at one commercial bank said.
ZAMBIA
The kwacha is expected to weaken due to increased dollar demand from commercial banks.
On Thursday, commercial banks quoted the kwacha at 12.1500 per dollar, down from 11.9900 a week ago.
"It is likely to continue trading with a bearish tone because there are fears that the kwacha might record further losses," independent financial analyst Maambo Hamaundu said.
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