Most of Africa’s main currencies are expected to remain stable over the next week as markets remained sluggish over the holidays, traders have said.
For instance, in Nigeria, the naira was expected to be stable in the week ahead, supported by the Central Bank of Nigeria’s regular interventions through the injection of dollars into the market.
The currency has been hovering at N360 to the dollar for investors, around the same level as in the parallel market. On the official market, it has been quoted at 306.05, a level at which the central bank has been intervening.
Also, Reuters reported that the Kenyan shilling was also expected to maintain the same level in the coming week with markets being closed on January 1 for the New Year’s holiday, traders said.
Commercial banks quoted the shilling at 103.10/30 per dollar compared with last Thursday’s close at 102.95/75. In the same vein, the Ugandan shilling was seen trading with a bearish tone over the coming days as traders pick up dollars to cover short positions amid tight inflows.
“Around this time, we normally see banks exerting a lot of demand as some move to cover short positions,†said Faisal Bukenya, head of treasury at Exim Bank.
This demand, he said, would likely push the local currency to weaken to around 3,630-3,640 levels.
Also, the Tanzanian shilling was expected to hold steady against the U.S. dollar in the days ahead, helped by a slowdown in business activity due to the year-end holiday season. Commercial banks quoted the shilling at 2,233/2,243 to the dollar on Thursday, barely moved from 2,238/2,243 a week ago.
“There is subdued business activity due to the holidays. The shilling will likely remain stable in the same levels over the coming week,†a trader at Commercial Bank of Africa Tanzania said.
The kwacha was expected to come under a bit of pressure against the dollar next week when normal business resumes after the holidays.
“Sentiment is for a weaker kwacha, it will probably go above 10.0000 per dollar next week as market activity increases,†independent financial analyst Maambo Hamaundu said.
For Ghana, its currency, the cedi, was seen fairly steady against the dollar for the rest of 2017 on subdued business activity until after the New Year holidays, traders said.
The local unit was trading at 4.5370 to the greenback on Thursday, almost the same level as its 4.5300 post-Christmas close on Wednesday, compared with 4.5100 a week ago, Reuters data showed.
“Markets are calm and the unit is expected to close the year around the 4.53 levels, in the absence of any last minute trading moves by banks in an attempt to paint good financial positions,†Joseph Biggles Amponsah, treasury head at NorthStar Home Finance, said.
