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    Saturday, March 23, 2024

    Africa-FX- Kenya's Shilling to Hold Steady, Nigerian Naira to Firm

    Kenya's shilling is expected to hold steady against the U.S. dollar in the next week to Thursday, while Nigeria's naira will strengthen, traders said.


    Ghana's cedi is expected to weaken further in the coming week due to persistent dollar demand from local corporates, mainly in the manufacturing and energy sectors, traders said.

    Refinitiv Eikon data showed the cedi trading at 12.9950 to the dollar on Thursday, compared to 12.8800 at last Thursday's close.

    "Cedi, this week, has been under a lot of pressure amid limited dollar supply," said Chris Nettey, Head of Trading at Stanbic Bank Ghana.

    "We expect the current trend to be curbed if the central bank continues to increase its intervention levels," he added.

    Andrews Akoto, Head of Trading at Absa Bank Ghana, said a potential increase in remittance inflows ahead of the Easter and Eid-ul-Fitr holidays could help boost the currency.


    Kenya's shilling is expected to hold steady, with importer demand matching supply, pausing three weeks of gains.

    Commercial banks quoted the shilling at 132.10/133.10 per dollar, compared to last Thursday's closing rate of 134.00/135.00.

    "Not much flows or activity on either side of the market at the moment," a trader at one commercial bank said.

    The shilling, which is up 18% against the dollar this year, is close to a one-year high, and was last bid at 132.00 per dollar on March 30, 2023, according to LSEG data.


    Nigeria's naira is expected to strengthen on the official and parallel markets next week, after the central bank said it has cleared all verified foreign exchange backlogs by paying $1.5 billion to settle outstanding obligations.

    LSEG data showed the naira was quoted at 1,450 to the dollar on the official market on Thursday, versus around 1,600 last week. The unit was quoted at 1,520 in street trading on Thursday, compared to 1,610 last week.

    "The market is beginning to price in an appreciation in the currency," one trader said.

    "It appears the CBN (Central Bank of Nigeria) is now on top of the forex situation and their policies are kicking in," he added.


    The Ugandan shilling is expected to firm as typical end-month dollar inflows from non-governmental organisations lend support, traders said.

    Commercial banks quoted the shilling at 3,870/3,880, compared to last Thursday's close of 3,880/3,890.

    "A bit of support may come from the usual charity flows that come through toward month-end," said an independent foreign exchange trader in the capital Kampala.

    Charities receive their donations in hard currency and convert some of it to pay salaries at the end of the month.

    He said the local unit was likely to oscillate in the 3,850-3,880 range in the coming days.


    The Zambian kwacha is likely to continue to remain on the back foot next week due to limited supply of hard currency on the market.

    On Thursday, the currency of Africa's second-largest copper producer was trading at 26.1000 per dollar, down from 25.0000 at the close of business a week ago.

    "The local unit is expected to decline in value in the near term," Access Bank said in a note on Thursday.

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