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HomeBusinessNigeria's naira to remain stable as Kenya shilling seeing weakens

Nigeria’s naira to remain stable as Kenya shilling seeing weakens

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Kenya’s shilling and Zambia’s kwacha are forecast to weaken against the dollar in the week to next Thursday, Uganda’s currency will strengthen, while those of Ghana and Nigeria will remain stable, traders said.


Nigeria’s naira is seen trading at current levels next week due to a shortage of liquidity as the currency finds its market level after the central bank’s liberalisation of the exchange rate market, traders said.

The naira hit a weekly low of N788.5 against the dollar on Monday, near a record low level it touched in the previous session and weaker than the black market rate of N785 naira.

“The currency is expected to continue to trade at current levels of between N750 and N790 … until we see improved FX liquidity and the central bank is able to attract other sources of FX inflows from (foreign portfolio investors) and international oil companies,” one trader said.

The local currency closed


Kenya’s shilling is expected to remain on the back foot in the week ahead as persistent demand for dollars from oil importers and manufacturers weighs on the local currency.

At 0814 GMT, commercial banks quoted the shilling at 140.75/95 per dollar compared with last Thursday’s close of 140.40/60. It hit 140.80/141.00 earlier in the day, a record low.

One trader at a commercial bank said the currency was expected to float around 141.00 levels.

The east African nation secured a $500 million 3-year and 5-year syndicated medium-term loan facility on Thursday in a much-needed boost as it has struggled to access international capital markets after Eurobond yields surged last year.

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“The secured facility will be handy in the near term. What needs to be cleared (up) is the opaqueness about our debt situation, and more importantly what steps the government is doing on the tax front,” the trader said.


Ghana’s cedi is expected to hold steady against the dollar next week on the back of high foreign exchange liquidity following central bank support, traders said.

Refinitiv Eikon data showed the cedi trading at 11.0000 to the dollar on Thursday, compared with 11.1500 at last Thursday’s close.

“The pair has traded sideways in recent sessions due to ample FX liquidity. We expect this narrative to persist in the near term, with the cedi continuing to hold its own against the greenback. Bid-offer spreads are also expected to tighten further,” said Sedem Dornoo, a senior trader at Absa Bank Ghana.

Chris Nettey, Head of Trading Stanbic Bank Ghana, said the cedi had appreciated marginally due to increased supply on the interbank market.


The Ugandan shilling is expected to firm in the coming week, drawing support from hard currency inflows from exporters of commodities such as coffee.

At 0850 GMT, commercial banks quoted the shilling at 3,690/3,700, compared with last Thursday’s close of 3,660/3,670.

“Inflows from commodity exporters are quite strong, yet from the demand side, activity is very low. I would reckon this dynamic should favour the shilling in the short term,” said an independent foreign exchange trader in the capital Kampala.


Zambia’s kwacha is likely to remain under pressure against the dollar next week as demand for hard currency in the market outstrips supply.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 18.0400 per dollar, compared to 17.4500 at the close of business a week ago.

Market players with dollar positions were holding on to hard currency in anticipation of higher rates, Access Bank said in a note on Thursday.

“The kwacha is anticipated to follow a downward trend in the near term given current market trends persist,” Access Bank said.

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