African currencies week ahead: Nigeria's naira to weaken, Kenyan shilling seen steady

The Nigerian naira is seen weakening in the days ahead on the back of accumulated demand, while the Kenyan shilling could steady as importer appetite in the energy sector sags.

NIGERIA - Nigeria's naira is seen weakening on the black market as dollar demand balloons from foreign investors and importers with payment obligations that have accumulated amid hard currency shortages triggered by an oil price crash, traders said.

The black market naira traded on the streets fell to 450 against the dollar on Thursday, reflecting the build-up of demand pressure. The naira had firmed on the unofficial market last week after a coronavirus lockdown was eased.

Meanwhile the naira is seen rangebound on the official

and over-the-counter spot markets, traders say, as bidders resist weakening the currency since the majority of dollar supply is from the central bank.

The bank resumed forex sales last week to help importers and individuals with dollar expenses abroad ramp up economic activity following a phased easing of the coronavirus lockdown.

KENYA - The Kenyan shilling is seen broadly stable in the coming week, with demand for hard currency from most importers including energy firms seen remaining thin.

At 1125 GMT on Thursday commercial banks quoted the shilling at 106.50/70 per dollar, compared with 105.90/106.10 at last Thursday's close.

TANZANIA - Tanzania's shilling is expected to remain stable next week on the back of some inflows from commodity exports.

Commercial banks quoted the shilling at 2,309/19 against the dollar on Thursday, the same level as last week.

A trader at a commercial banks in Tanzania's commercial capital Dar es Salaam said the local currency was likely to remain stable with hard currency supplies from exports of commodities like minerals matching demand.

Tanzania mainly ships gold, among other minerals.

UGANDA - Uganda's shilling is seen trading with a firmer tone, helped by a central bank mop-up of excess local currency liquidity from the interbank market.

At 1126 GMT commercial banks quoted the shilling at 3,780/3,790, compared to last Thursday's close of 3,790/3,800.

ZAMBIA - The kwacha is seen trading slightly weaker against the dollar as demand for the US currency picks up after tax payments. On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 18.2500 per dollar, up from 18.4130 at the close of trading a week ago.