The naira will likely weaken against the dollar at the parallel market next week due to an anticipated increase of naira liquidity from the Federal Government, foreign exchange players and analysts have said.
Specifically, the naira is expected to fall marginally at the parallel market in anticipation of rising naira liquidity from budgetary allocations to the Federal Government agencies, but will remain unchanged on the official interbank market.
The naira fell marginally to 323 against the dollar on Thursday, compared to 320 against the greenback at the parallel market last week, while at the official window the currency was trading at 198.90 to the dollar around the peg rate.
“We anticipate a rise in government spending in the coming weeks and this could put the forex market under pressure and a slight depreciation in the naira is expected,” one currency trader said.
Meanwhile, the Central Bank of Nigeria is planning to borrow N167.51bn ($843.67m) via treasury bills with maturities ranging between three-month and one-year on April 20.
The CBN said it was aiming to raise N36.78bn in the three-month paper, N35bn in the six-month note and N95.73bn in the one-year debt, using the Dutch auction system.
The central bank issues short-dated debt to mop-up excess liquidity in the banking system to curb rising inflation, finance a portion of the budget deficit and help banks manage their liquidity
Meanwhile, the Zambian kwacha is expected to remain firm against the greenback due to dollar sales by companies preparing to pay taxes due in the local currency.
Ghana’s cedi is seen fairly steady on muted economic activity as investors gauge the policy direction of new central bank governor Abdul-Nashiru Issahaku.
