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Nigerian naira and other African currencies may trade firm at the forex market ahead of the festive season

Authors:

Aderemi Ojekunle
Nigerian naira and US dollar
Nigerian naira and US dollar
  • Nigerian naira to remain stable ahead of the festive season supported by frequent interventions by the Central Bank of Nigeria.
  • African currencies also expected to hold down strong ahead of next week, according to a report by Reuters.
  • Nigeria operates a multiple FX regime, the naira closed at N361 per dollar at the parallel market, and N363.48/$1 at the I&E – Investors’ & Exporters’ FX Window, on Thursday.

Nigerian naira to remain stable ahead of the festive season supported by frequent interventions by the Central Bank of Nigeria (CBN), Reuters reports.

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On Thursday, the currency traded N361 to the dollar at the parallel market and N363.48 per dollar at the I&E – Investors’ & Exporters’ FX Window. On the official market, the currency closed flat at N306.90/$1.

A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016. REUTERS/Akintunde Akinleye/File Photo
A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016. REUTERS/Akintunde Akinleye/File Photo Reuters/Akintunde Akinleye

A trader told Reuters that the market may weaken next week as offshore outflows tick in Nigeria's foreign exchange market.

“We are seeing offshore outflows and not much is coming back in.” “I expect that to continue next week. If there is no anchor, the currency could weaken.” the trader said.

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Apart from Nigerian currency, a report by Reuters expected the Zambian, Tanzanian, and Ugandan currencies will firm next week.

Ugandan shilling stable as central bank mops up liquidity
Ugandan shilling stable as central bank mops up liquidity ece-auto-gen

The Ugandan shilling will ride on the country's inflows from Charities and remittances while Tanzania’s shilling slightly to appreciate due to reduced activities in the market and month-end dollar sales to meet local currency obligations.

Zambia kwacha projected to hold firm owing to the currency's monetary authority policy in statutory reserve requirements.

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Authors:

Aderemi Ojekunle

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