Nigerian naira seen stable, Kenya shilling to depreciate
Nigeria’s naira is expected to remain unchanged on the official market in the week ahead after the local currency fell this week on the parallel market due to a government plan to reopen airports later this month, which could increase dollar demand, traders said.
The naira was quoted at 477 per dollar on the unofficial market on Thursday, recovering from a low of 480 it touched on Tuesday after the government announced plans to resume international travel on Aug. 29.
The currency was traded at 386.42 on the over-the-counter spot market on volumes in excess of $220 million.
Volumes on the spot market, widely quoted by investors and importers, have been declining daily, traders said, citing the absence of foreign inflows and inadequate central bank intervention, despite rising oil prices.
Dollar shortages have plagued the country for months after sharp falls in the price of oil, Nigeria’s main export.
The Kenyan shilling is seen weakening due to dollar demand from merchant importers and firms in the energy sector, which normally increases in the last days of the month.
Commercial banks quoted the shilling at 108.00/20 compared with last Thursday’s close of 108.25/45. The shilling hit an
all-time low on Wednesday of 108.50/70.
“We’re going into the end of month period, (dollar) demand will be strong, while there are no inflows in the market,” said a trader at one of the commercial banks. “I expect the shilling to weaken.”