African currencies week ahead: Nigeria's naira to stay pressured, other African FX seen steady

15 Feb, 2015

Nigeria's battered naira is likely to extend losses next week after plumbing to record lows with investors worried by Africa's top crude exporter postponing its general election by six weeks. Other African currencies are expected to be steady.
Central bank governor Godwin Emefiele said the naira was "appropriately priced" and told investors there was no need to panic despite a nearly 25 percent slide against the dollar in the last three months.
The central bank plans to issue a 630 million cedi ($185.29 million) bond, open to offshore investors, to roll over maturities and also finance projects. "Significant offshore participation should support the local currency, as it will mean either an introduction of fresh forex into the market, or limited sale of existing cedi for dollars," Barclays Bank Ghana trader Michael Akpakli said.
"As long as debt yields maintain their high levels or even climb further we shouldn't see any more undue depreciation pressure," he added. Interest rates on government debt have risen sharply in anticipation of a substantial surge in public spending ahead of elections early next year.

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