Nigeria’s currency is expected to come under pressure on the black market this week, with Uganda’s seen firming and Kenya and Zambia’s holding stable.
Nigeria’s naira is seen weakening on the black market as dollar shortages at official sources cause investors and importers to channel demand to the parallel market, traders said.
The black market naira traded on the streets fell to 460 against the dollar on Thursday, reflecting the build-up of demand. The naira was quoted at 450 last week on the unofficial market after a lockdown was eased.
Dollar demand from investors and importers has ballooned with payment obligations accumulating amid hard currency shortages triggered by the oil price crash.
The Nigerian central bank governor has warned domestic and foreign investors against patronising the black market, saying it was helping to overheat that market.
The naira is seen rangebound on the official and over-the-counter spot markets, traders say.
The Ugandan shilling is seen trading firmer helped by month-end inflows from some charities looking to pay salaries.
At 1002 GMT commercial banks quoted the shilling at 3,785/3,795, compared to last Thursday’s close of 3,782/3,792.
“Because of the coronavirus related job losses the volumes (of inflows) will probably be limited but whatever comes in will lend a little support,” a trader at a commercial bank in the capital told Reuters.
The Kenyan shilling is seen stable this week with markets eyeing a resumption of inflows from remittances and horticulture exports amid month-end dollar demand from merchandise importers, traders said.
Commercial banks quoted the shilling at 106.75/95 per dollar, compared with 106.60/80 at last Thursday’s close.
“Horticulture exporters are talking of opening up towards June, once those inflows check in it will support the shilling,” said a senior trader from one commercial bank.
The kwacha is expected to hold steady against the U.S. dollar this week supported by month-end hard currency sales and a decline in imports.
On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 18.0440 per dollar from 18.2630 at close a week ago.
“It should continue trading within the same 18-18.6 levels this week,” independent financial analyst Maambo Hamaundu said.