Forex: Traders expect stable naira next week

Forex: Traders expect stable naira next week

Forex: Traders expect stable naira next week

The naira is expected to be stable at the official interbank and parallel markets next week following the sale of $313m by the Central Bank of Nigeria to clear a backlog of dollar demand from airlines and other firms.

The local currency was quoted at 455 to the dollar at the parallel market on Thursday, against 458 to the dollar last week, while there was no quote on the official window more than two hours after the market opened, Reuters reported.

The naira has consistently closed around 305.5 to the dollar at the interbank market since August due to daily intervention in the market by the CBN.

The International Money Transfer Operators have also been providing dollar liquidity to support the local currency at the Bureau De Change window.

The Kenyan shilling is expected to trade in a tight band next week with support from foreign exchange inflows from investors chasing government debt offset by dollar demand from importers as the month draws to an end, according to traders

On Wednesday, commercial banks were quoting shilling at 101.25/35, and it barely moved from 101.20/30 last week. Markets were closed on Thursday for a public holiday.

The Tanzanian shilling is expected to strengthen modestly next week, helped by firms selling dollars to meet end-of-month payments and foreign exchange inflows from agriculture export earnings.

Commercial banks quoted the shilling at 2,184/2,189 to the dollar on Thursday, weaker than 2,178/2,188 a week ago.

“We expect the shilling to appreciate slightly next week due to dollar sales by companies to meet end-of-month obligations and inflows from the agriculture sector, particularly cashew nut exports,” a trader at CRDB Bank, Moses Kawiche, said.

Zambia’s kwacha is likely to remain stable against the dollar next week with corporate demand for the currency to meet end-of-month payments balanced by rising dollar demand to buy imports.

At 0937 GMT, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.8000 per dollar from 9.9150 a week ago.

“Although companies will be converting dollars to pay salaries and other month-end obligations, demand for hard currency is also rising because of imports ahead of Christmas,” independent financial analyst, Maambo Hamaundu, said.

The Ugandan shilling is forecast to make slim gains next week, supported by foreign exchange inflows from coffee exports and commercial banks paring long dollar positions.

At 0900 GMT, commercial banks quoted the shilling at 3,430/3,440, stronger than last Thursday’s close of 3,445/3,455.

A trader at Diamond Trust Bank, David Bagambe, said a central bank liquidity mop-up of excess shilling liquidity would also help.

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