Nigerian, Kenyan currencies seen stable in the week ahead

Reuters September 12, 2019
  • Nigerian naira and the Kenyan shilling are expected to be stable against the dollar.
  • The bank launched a 300 billion naira open market.
  • Commercial banks quoted the currency of Africa’s second-largest copper producer.

NAIROBI: The Nigerian naira and the Kenyan shilling are expected to be stable against the dollar in the week ahead, backed by offshore investors into local government securities.

NIGERIA

Nigeria’s naira is likely to hold its own against the dollar next week as the central bank steps up its sale of open market securities to attract foreign inflows, traders said.

The naira was quoted at 362 per dollar on Thursday, unchanged from a week earlier. The currency was quoted at 360 on exchange bureaus and at 306.35 on the official market, which is backed by the central bank. Nigeria operates a multiple currency regime.

Foreign inflows, which dried up last month due to low yields, have started to come back after the central bank increased the frequency of debt issuance. The bank launched a 300 billion naira open market (OMO) auction on Thursday.

KENYA

The Kenyan shilling could be stable against the dollar in the coming week, supported by inflows from portfolio investors into government debt, traders said.

Commercial banks quoted the shilling at 103.75/95 per dollar, the same as last Thursday’s closing level.

UGANDA

The Ugandan shilling is seen trading in a stable range over the next one week as planned mid-month corporate tax payments limit demand for hard currency from importers.

At 0851 GMT, commercial banks quoted the shilling at 3,660/3,670, compared to last Thursday’s close of 3,675/3,685.

“I expect purchases of forex to me minimal because of the usual mid month tax payments, that should keep the local unit in a relatively stable range,” said Faisal Bukenya, an independent foreign exchange trader.

ZAMBIA

The Zambian kwacha is expected to remain stable against the US dollar next week, supported by tightening liquidity in the local money market.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 13.0750 per dollar, from a close of 13.1100 a week ago.

“Our expectation remains unchanged, resistance is placed at 13.20,” the local branch of South Africa’s First National Bank (FNB) said in a note.

TANZANIA

The Tanzanian shilling is expected to hold steady in the days ahead, helped by subdued dollar demand from importers.

Commercial banks quoted the shilling at 2,293/2,300, unchanged from last Thursday’s closing price.

“I don’t see any movement on the demand side and there are no major inflows of dollars in the market at the moment,” said a foreign exchange trader at a bank in Tanzania’s commercial capital Dar es Salaam said.

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