NAIROBI, June 15 Nigeria's naira could
strengthen against the dollar in the coming week as offshore
investors pile into local stocks, while Kenya's shilling is
expected to be stable.
The Nigeria naira could strengthen against the
dollar in the coming days as more offshore investors buy up
local stocks after MSCI increased the country's weighting in its
frontier market index.
"We are beginning to see some international investors
returning to the (stock) market," Olabisi Ayodeji, a research
analyst, told Reuters.
Traders said the re-emergence of offshore interest in the
stock market has boosted dollar inflows to the economy, leading
to a gradual exchange rate convergence.
The local currency was quoted at 365 to the dollar on the
black market on Thursday, against 368 per dollar
last week. It is trading at around 305.70 to the dollar on the
official interbank window.
The Kenyan shilling is expected to trade in a tight
range in the coming week due to demand from multinational
companies buying shillings to meet their tax obligations, as
well as low oil prices reducing the import bill, traders said.
At 1101 GMT, commercial banks quoted the shilling at
103.45/65 per dollar, compared with 103.24/45 at last Thursday's
"We've seen oil prices go down to 45 dollars per barrel so
we don't expect any un-warranted demand," said a trader from a
The Ugandan shilling is seen trading in a stable
range as the central bank curbs liquidity in the market, making
it slightly more expensive to buy dollars.
At 0953 GMT, commercial banks quoted the shilling at
3,583/3,593, little changed from last Thursday's close of
"We'll probably see the shilling play stable ... in range of
3,575-3,600," said a trader at a leading commercial bank, adding
the excess liquidity removal will keep dollar demand subdued.
The Tanzanian shilling is expected to trade in a
tight range in the coming days, mainly due to a general slowdown
in business activity.
Commercial banks quoted the shilling at 2,234/2,244 to the
dollar on Thursday, barely moved from 2,235/2,245 a week ago.
"We expect stable prices next week due to subdued demand for
dollars and a slowdown in inflows of hard currency in the
market," said a trader at CRDB Bank.
Ghana's cedi is expected to be stable in the week
ahead as firms due to a healthy supply of dollars from firms and
the central bank, traders said.
The unit was trading at 4.4085 per dollar by mid-morning on
Thursday, compared with 4.4200 a week ago.
Joseph Biggles Amponsah, an analyst at Accra-based Dortis
Research, said the cedi could also be supported by falling
inflation and short-term lending rates.
The Zambian kwacha is expected to remain firm against
the dollar next week as firms sell dollars to pay their workers
and suppliers at the end of the month.
At 1007 GMT, commercial banks quoted the currency of
Africa's second biggest copper producer at 9.1800 per dollar
from a close of 9.2500 a week ago.
"The short-to-medium term outlook for the local unit seems
to indicate that the kwacha is likely to remain firm," Cavmont
Bank said in a market note.
(Reporting by Oludare Mayowa, John Ndiso, Kwasi Kpodo, Elias
Biryabarema, Fumbuka Ng'wanakilala, Chris Mfula; Compiled by
Aaron Maasho Editing by Jeremy Gaunt)