Nigeria’s naira, Kenya’s and Uganda’s shillings and Ghana’s cedi are expected to hold steady against the dollar this week, traders said.
The naira is expected to be stable this week against the U.S. currency as traders eye the result of last week’s central bank first auction of the Chinese yuan in Nigeria
The central bank last week Friday auctioned the yuan in a move to reduce reliance on the dollar and use an alternative currency for imports from China, one of Nigeria’s main trading partners.
Traders said the naira traded around 362 level per dollar and that customers were shying away from trading the local unit weaker despite the market being short on the U.S. currency. On the official market the naira is quoted at around 305.
The Kenyan shilling is expected to trade in a tight range with market players eyeing central bank’s monetary policy meeting on Monday for direction, traders said.
Commercial banks quoted the shilling at 100.40/60 per dollar, compared with 100.65/75 at last week Thursday’s close.
“We’re still biased on the shilling maintaining the current level … we’re waiting for indications from the MPC,” said a trader from a commercial bank.
The Ugandan shilling is seen trading in a stable range supported by typical end of month inflows of hard currency from non-governmental organisations and exporters of commodities like coffee.
Commercial banks quoted the shilling at 3,705/3,715,compared to last Thursday’s close of 3,735/3,745.
Faisal Bukenya, head of treasury at Exim Bank Uganda, said the anticipated inflows would “allow the shilling to play around 3,700 level” against the dollar in the coming days.
Charities typically convert some of their dollar holdings to pay salaries while commodity exporters also receive outstanding payments for shipments executed in the course of the month.
Ghana’s cedi is seen unchanged against the dollar mainly on recent central bank dollar sales to shore up the volatile unit after it dipped to record lows earlier this month.
The currency of the major commodity exporter has been under pressure since May due to global pressures as investors exited emerging market assets in favour of an improving U.S economy. Itwas trading at 4.8000 to the greenback at mid-morning on
Thursday, compared to 4.7850 a week ago.
“We have seen a consistent and fairly improved support from the central bank in recent times and we expect this to have a cumulative stabilizing effect on the cedi in the coming week,” currency analyst Fred Mofuo said.