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WEEKAHEAD-AFRICA-FX-Nigerian naira to weaken, debt worries seen hurting Zambian kwacha

Published 04/03/2021, 13:55
Updated 04/03/2021, 14:00
© Reuters.

© Reuters.

LAGOS, March 3 (Reuters) - The Nigerian naira is seen
extending its losing streak while the Zambian kwacha is also
expected to weaken, hurt by worries over the country's debt
problems.

NIGERIA
The naira NGN=D1 is expected to weaken on the spot market in
the coming week after it dropped to a record closing low on
Wednesday and the central bank last week acknowledged that the
currency was trading weaker over-the-counter. The currency was quoted at 411.10 naira to the dollar on the
over-the-counter spot market on Thursday, exchange data showed.
"Majority of liquidity on the market is traded higher than
the closing levels," one trader told Reuters, adding that he
anticipated the weakening streak to continue.
The spot market naira has been hitting intra-day lows since
February but has remained flat on the official market backed by
the central bank at 381 naira since last July. The currency
traded at 480 naira on the black market on Thursday.

UGANDA
The Ugandan shilling UGX= is seen trading within a stable
range but may weaken slightly on the back of demand from
foreign-owned firms looking to pay last year's dividends to
their shareholders.
At 0949 GMT commercial banks quoted the shilling at
3,655/3,665, compared to last Thursday's close of 3,660/3,670.
"Foreign-owned corporates usually exert higher demand in
March because of dividend payments so we anticipate some
activity around that," said a trader at one commercial bank.

TANZANIA
Tanzania's shilling TZS= is expected to hold steady next week
with inflows from the mining sector helping provide support.
Commercial banks quoted the shilling at 2,314/2,324 on
Thursday, the same levels recorded a week earlier.
"We expect the shilling to continue to be stable next week
with the supply of dollars from the mining sector... this will
help match the demand," a trader in one of the commercial banks
in Dar es Salaam said.

ZAMBIA
The kwacha ZMW= is seen remaining under pressure against the
dollar in the coming week as demand for hard currency continues
to outweigh supply.
On Thursday, commercial banks quoted the currency of
Africa's second largest copper producer at 21.8700 per dollar
from a close of 21.7455 on Thursday last week.
"The trend remains tilted towards kwacha depreciation and
this is largely because of the country's debt issues,"
independent financial analyst Maambo Hamaundu said.
Zambia's debt default has fuelled negative sentiment,
hitting investment inflows and the local currency's performance.

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