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The naira is seen weakening against the United States dollar on the black market in the coming days as demand for the dollar increases.
Stakeholders and industry analysts, however, said the local unit was expected to trade within a range on the investor and exporters forex window and official interbank market.
The local currency weakened to 370 against the dollar on the black market on Thursday, compared with 364/dollar last Thursday, Reuters reported.
This came on the back of surging demand for the dollar by summer holidaymakers and parents paying school fees for their children abroad, forex traders said.
The naira was quoted at 362.39 to a dollar on the investor and exporters forex window on Thursday against 367.49 per dollar last week.
On the official interbank window, the local currency traded around 305.65 to a dollar.
The gain on the investor window was fuelled by increased dollar inflows from offshore fund managers investing in the domestic equity market, traders said.
Meanwhile, Kenya’s shilling is expected to strengthen with commercial banks selling off the greenback, and the Zambian kwacha is set to firm as companies convert forex ahead of month-end salary payments.
Kenya’s shilling will firm, helped by commercial banks selling off dollars, tight liquidity in money markets and political tensions easing after the opposition said it would challenge the August 8 presidential election results in court.
“I still think that it may firm. People are unwinding their long positions pre-elections and also due to money market liquidity,” a senior trader at one commercial bank told Reuters.
The shilling will also get a lift after opposition leader Raila Odinga said he would contest the election outcome in court, calming concerns that further street protests might bring widespread violence.
“That has eased tension. Players were a bit concerned about street protests, and now that is probably behind us,” the senior trader said.
The Zambian kwacha is likely to strengthen in the coming week, buoyed by hard currency conversions by companies preparing to pay salaries and other month-end dues.
Ghana’s cedi is seen firm next week on offshore portfolio inflows for the settlement of a five-year debt to be issued on Friday, according to an analyst.
“Investor confidence in the Ghanaian economy continues – we expect to see high offshore participation in this week’s bond sale and this will support the cedi,” analyst Joseph Amponsah of the Accra-based Dortis Research said.
