Nigeria's local currency is expected to trade on the back foot next week while those of Kenya, Uganda, Zambia and Tanzania hold steady.
NIGERIA - Nigeria's naira is seen weakening on the black market next week after touching its lowest level against the US dollar in three years due to the oil price crash this week, traders said.
The naira hit a new low of 425 on the black market, used mostly by individuals after the central bank last month suspended forex sales to retail currency traders due to a coronavirus lockdown.
The lockdown of Nigeria's main cities to stop the spread of the virus has slowed economic activity and currency markets, particularly with few central bank operations and traders working from home. The crash in oil prices will also hurt the oil-producing country.
The naira has been hitting new lows on the over-the-counter spot and black markets on thin volumes since last month after the central bank adjusted its official rate, implying a 15% devaluation. It last traded at 387.54 on the spot market.
KENYA - The Kenyan shilling is seen holding steady against the US dollar in the coming week with market participants anticipating dollar disbursements from lenders to help Kenya combat the impact of the COVID-19 pandemic, traders said.
Commercial banks quoted the shilling at 106.95/107.15 per dollar, compared with 106.20/40 at last Thursday's close.
"We expect at some point the government will receive some support from the IMF and World Bank because of the coronavirus, anytime those flows check in, it will offer support," said a senior trader from one commercial bank.
UGANDA - The Ugandan shilling is seen trading in a stable range, drawing support from hard currency inflows from offshore investors who participated in this week's Treasury Bill auction.
At 1004 GMT commercial banks quoted the shilling at 3,785/3,795, compared to last Thursday's close of 3,660/3,670.
This week the central Bank of Uganda sold a total of 225 billion Uganda shillings worth of Treasury Bills of 91-, 182-, and 364-day tenures.
"There will be a bit of support for the local unit from inflows into the auction from offshore players," said a trader from one of the commercial banks.
ZAMBIA - The kwacha is likely to remain range-bound against the US dollar as companies continue buying the local currency in preparation for month-end payments.
On Thursday, the currency of Africa's No.2 copper producer was trading at 18.4630 per dollar, strengthening from a close of 18.6330 a week ago.
"The local unit is expected to trade relatively stable in the interim with a stronger bias, as month end inflows are yet to be fully priced in," Zambia National Commercial Bank (ZANACO) said in a note.
TANZANIA - Tanzania's shilling is expected to hold steady versus the US dollar next week due to matching demand and supply of hard currency.
On Thursday, commercial banks quoted the shilling at 2,309/2,319, the same level at which it closed a week earlier.
"We don't expect any major changes next week. There is little demand," a trader in of the commercial banks in Dar es Salaam said.
Comments
Comments are closed.