AFRICA FX REPORT: Nigerian naira seen weakening further

NAIROBI, Sept 22 (Reuters) – The Nigerian naira is expected to weaken further in the next week mainly due to fears of constrained supplies of dollars.

NIGERIA

The naira hit a record low of 436 to the dollar on the parallel market on Thursday and is expected to depreciate further due to concerns about lack of dollars in the market.

The foreign exchange reserves of Africa’s top crude producer were down to $24.83 billion by Sept. 19, its lowest level in more than three years.

Traders said there had been no significant policy response to the fall in the reserves, further fuelling the concerns.

The naira was quoted at 315 to the dollar on the official interbank market on Thursday, down from 305 a dollar, where it had settled in the last one week.

KENYA

The Kenyan shilling is expected to hold steady against the dollar in the coming week amid rising demand from the manufacturing sector, traders said.

At 0912 GMT, commercial banks quoted the shilling at 101.20/30 to the dollar, the same as last Thursday’s close.

“Manufacturers will be buying dollars as the end-month demand cycle begins,” said a trader from a commercial bank.

UGANDA

The Ugandan shilling could weaken due to an expected rebound in appetite for dollars from importers, as the month draws to a close.

At 1057 GMT, commercial banks quoted the shilling at 3,380/3,390, slightly weaker than last Thursday’s close of 3,370/3,380.

“We anticipate a higher level of demand from importing corporates which could fuel some depreciation,” said a trader at a leading commercial bank.

GHANA

The Ghanaian cedi could remain steady in coming weeks on expected dollar inflows from a $1.8 billion syndicated cocoa loan signed by industry regulator Cocobod on Wednesday, analysts said.

The cedi, which has been fairly stable this year, was trading at 3.98 to the dollar on Thursday compared to 3.9705 a week ago.

“In the week ahead the pair (USD/GHS) is expected to remain at 3.97 on expectations of fresh inflows from this week’s $1.8 billion annual cocoa loan,” said Joseph Biggles Amponsah, analyst at Accra-based Dortis Research.

ZAMBIA

The kwacha is likely to firm next week due to anticipated conversions of hard currency by firms preparing to pay month-end costs and taxes.

At 1206 GMT, commercial banks quoted the currency of Africa’s second largest copper producer at 10.0400 per dollar from 9.9800 a week ago.

“We could see a bit of gains … There will be forex in the market because corporates will be converting their forex to meet salary obligations and other month-end expenditure,” independent financial analyst Maambo Hamaundu said.

TANZANIA

The Tanzanian shilling is expected to strengthen marginally against the U.S. dollar in the days ahead, helped by subdued demand for greenbacks from importers and increased inflows from the tourism and agriculture sectors.

Commercial banks quoted the shilling at 2,181/2,186 to the dollar on Thursday, barely moved from 2,182/2,187 a week ago.

“The shilling could appreciate slightly next week. The market is very stable, with dollar inflows coming in from tourism and agricultural commodity exports such as cotton, coffee and tobacco,” said Mohamed Laseko, a dealer at CRDB Bank. (Reporting by Oludare Mayowa, Nqobile Dludla, John Ndiso, Elias Biryabarema, Fumbuka Ng’wanakilala and Kwasi Kpodo; Editing by Ruth Pitchford)

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