Naira to gain further on stock purchases
The naira is expected to strengthen
against the United States dollar in the coming week as offshore
investors pile into local stocks, currency and financial analysts have
According to them, the naira will likely
strengthen against the dollar in the coming days as more offshore
investors buy up local stocks after MSCI increased the country’s
weighting in its frontier market index.
“We are beginning to see some
international investors returning to the (stock) market,” a research
analyst, Olabisi Ayodeji, told Reuters.
Traders said the re–emergence of
offshore interest in the stock market had boosted dollar inflows to the
economy, leading to a gradual exchange rate convergence.
The naira was quoted at 365 to the
dollar on the black market on Thursday, against 368 per dollar last
week. It is trading at around 305.70 to the dollar on the official
Meanwhile, the Kenyan shilling is
expected to trade in a tight range in the coming week due to demand from
multinational companies buying shillings to meet their tax obligations,
as well as low oil prices reducing the import bill, according to
At 1101 GMT, commercial banks quoted the shilling at 103.45/65 per dollar, compared with 103.24/45 at last Thursday’s close.
“We’ve seen oil prices go down to 45
dollars per barrel so we don’t expect any un–warranted demand,” said a
trader from a commercial bank.
The Ugandan shilling is seen trading in a
stable range as the central bank curbs liquidity in the market, making
it slightly more expensive to buy dollars.
At 0953 GMT, commercial banks quoted the shilling at 3,583/3,593, little changed from last Thursday’s close of 3,585/3,585.
“We’ll probably see the shilling play
stable … in range of 3,575–3,600,” said a trader at a leading commercial
bank, adding the excess liquidity removal will keep dollar demand
The Tanzanian shilling is expected to
trade in a tight range in the coming days, mainly due to a general
slowdown in business activity.
Commercial banks quoted the shilling at 2,234/2,244 to the dollar on Thursday, barely moved from 2,235/2,245 a week ago.
“We expect stable prices next week due
to subdued demand for dollars and a slowdown in inflows of hard currency
in the market,” said a trader at CRDB Bank.
Ghana’s cedi is expected to be stable in
the week ahead as firms due to a healthy supply of dollars from firms
and the central bank, according to traders.
The unit was trading at 4.4085 per dollar by mid–morning on Thursday, compared with 4.4200 a week ago.
An analyst at Accra–based Dortis
Research, Joseph Biggles Amponsah, said the cedi could also be supported
by falling inflation and short–term lending rates.
The Zambian kwacha is expected to remain
firm against the dollar next week as firms sell dollars to pay their
workers and suppliers at the end of the month.
At 1007 GMT, commercial banks quoted the
currency of Africa’s second biggest copper producer at 9.1800 per
dollar from a close of 9.2500 a week ago.