Naira may reverse loss on dollar sales

Naira may reverse loss on dollar salesThe naira is likely to strengthen next week on an increase in dollar sales to Bureau De Change operators, according to analysts and foreign exchange.

The naira is expected to appreciate at the black market next week after the Central Bank of Nigeria proposed an increased dollar sale to the BDC operators.

The CBN is planning to raise dollar sales to each of the BDCs to $40,000 from the present $20,000, which will improve liquidity and help support the local currency.

The naira was quoted at 410 to the dollar on the black market on Friday, compared with 398 the previous Friday.

At the official window, it closed at N306.10 to the dollar on Thursday against N306.20 per dollar last week.

Meanwhile, the Kenyan shilling may strengthen in the coming week amid weak importer demand and hard currency inflows from portfolio investors and non-governmental organisations, traders said.

At 1100 GMT on Friday, commercial banks quoted the shilling at 103.30/40 to the dollar, compared with 103.20/40 at last Thursday’s close.

“Importer demand is diminishing…the upcoming bond auction should attract good inflows,” said a trader from a commercial bank, referring to bond sales that closed on Tuesday.

Ghana’s cedi should be stable against the dollar next week on the central bank’s support amid low market activity during the Easter holidays, analysts said.

After touching record lows of 4.7420 to the dollar last month, the cedi recouped and has steadied around 4.2000 since last week, down 0.32 per cent since January, according to Reuters data.

The Uganda shilling is expected to trade in a stable range over the next week as businesses close for Easter holidays and mid-month tax payments trim demand from companies for hard currency.

At 1127 GMT, commercial banks quoted the shilling at 3,610/3,620, unchanged from last Thursday’s closing level.

“A significant amount of liquidity will be soaked up by tax payments, so we’ll generally see most firms staying on the sidelines,” said a trader at a leading commercial bank.”

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