African currencies week ahead: Kenyan, Nigerian units seen range-bound

NAIROBI: Kenya’s and Nigeria’s currencies are expected to trade within existing ranges in the coming week, analysts and traders said. Tanzania’s currency is seen holding steady, while Uganda’s is expected to firm.

NIGERIA — The naira is seen range-bound next week as the central bank tries to boost forex sales through direct interventions to local firms and foreign investors, traders said.

The currency traded within a range of 410.46 naira to 422 naira on the over-the-counter spot market on Thursday after the central bank last week re-priced its futures rate upwards and sold dollars to foreign investors.

The naira was quoted at 485 per dollar on the black market on Thursday, a level it touched last week. It remains flat on the official market, which is backed by the central bank, at 381 naira, where it has been stuck since last July.

TANZANIA — Tanzania’s shilling is expected to hold steady next week as demand for the US dollar from oil and manufacturing importers will be offset by inflows from foreign direct investments.

Commercial banks quoted the shilling at 2,310/2,324 on Thursday, the same levels recorded a week earlier.

KENYA — Kenya’s shilling is also expected to be range-bound in the coming week, depending on the level of demand for dollars from importers, especially on the energy side as companies meet their end-of-month obligations, traders said. On Thursday, commercial banks quoted the shilling at 107.75/107.95 against the dollar compared with last week’s close of 108.40/108.60.

UGANDA — The Ugandan shilling is seen extending its gains in the coming days amid low appetite for hard currency from importers. At 0845 GMT, commercial banks quoted the shilling at 3,590/3,600, compared to last Thursday’s close of 3,605/3,615.

ZAMBIA — The kwacha is likely to continue trading on the back foot against the dollar in the week ahead as demand for hard currency, driven by factors including debt servicing, continues to surpass supply. On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 22.2740 per dollar, marginally down from a close of 22.2300 at the close of business last Thursday.