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AFRICA-FX-Kenyan, Nigerian currencies seen range-bound

Published 29/04/2021, 13:30
© Reuters.
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NAIROBI, April 29 (Reuters) - 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 NGNFX=BDCN 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 NGNFX=BDCN on Thursday, a level it touched last week. It remains flat on the official market NGN=D1 , which is backed by the central bank, at 381 naira, where it has been stuck since last July.

TANZANIA
Tanzania's shilling TZS= is expected to hold steady next week as demand for the U.S. 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. "We expect the shilling to remain stable, supported by expected inflows from Chinese investors," said Terry Karanja, a treasury associate at AZA, a Nairobi-based FX trading firm.

KENYA
Kenya's shilling KES= 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. "It is expected to trade within the range of 107.50 to 108.50 in the coming week," one trader at a Nairobi-based commercial bank said.

UGANDA
The Ugandan shilling UGX= 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. Demand from importers is expected to remain flat, a trader at one commercial bank said. "I think it has something to do with the overall slump in consumer spending due to the effects of COVID-19," he said, adding the shilling could trade between 3,575-3,600.

ZAMBIA
The kwacha ZMW= 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. Zambia National Commercial Bank (ZANACO) said in a weekly note, although the central bank was likely to continue with foreign exchange injections, that market conditions still pointed to a troubled Kwacha.

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