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WEEKAHEAD-AFRICA-FX-Nigeria's naira to weaken, Kenyan shilling seen steady

Published 14/05/2020, 14:16
WEEKAHEAD-AFRICA-FX-Nigeria's naira to weaken, Kenyan shilling seen steady
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NAIROBI, May 14 (Reuters) - 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 NGNFX=BDCN 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
NGN=D1 and over-the-counter spot NAFEX=FMDQ 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 KES= 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.
"We have oil prices at a really low level and very low
demand, so that might compensate for any weakening pressure on
the shilling," said a senior trader from one commercial bank.

TANZANIA
Tanzania's shilling TZS= 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 UGX= 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.
The central bank on Thursday removed a total of 690.5
billion Ugandan shillings ($182.6 million) worth of excess
liquidity in the interbank market via a seven-day repurchase
agreement (repo) and a deposit auction.
"I see the unit (shilling) trading sideways, but broadly
there will be some bias on the strengthening side," said a
trader from one commercial bank.

ZAMBIA
The kwacha ZMW= is seen trading slightly weaker against
the dollar as demand for the U.S. 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.
"It should remain within the 18-18.5 range with chances of
losing a bit of ground after the end of this week's VAT
(value-added tax) payments," one commercial bank trader said.

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