WEEKAHEAD-AFRICA-FX-Nigerian naira to fall after open-market switch

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WEEKAHEAD-AFRICA-FX-Nigerian naira to fall after open-market switch
Credit: © Reuters.

NAIROBI, June 16 (Reuters) - The Nigerian naira is expected
to fall next week as the country switches to a flexible, market
driven exchange rate policy.

The Nigerian naira NGN=D1 could slide to a record low when
the new open-market foreign currency trading announced by the
central bank starts on Monday, traders said.
The central bank said on Wednesday it would abandon its
16-month fixed exchange rate policy. L8N1973DJ
"We are expecting an initial wide depreciation of the naira
at the official window, but the rate could stabilise at around
the present black market rate of 370 depending on how much
dollars the central bank will be willing to push into the
market," said a senior trader.

The Kenyan shilling KES= is expected to ease slightly due
to dollar demand from the energy sector, traders said.
At 0915 GMT, commercial banks quoted the shilling at
101.15/25, compared with last Thursday's close of 101.10/20.
"Appetite for dollars has picked up, but slightly. There's
(demand from) the energy sector. We have seen it in the last few
days," a trader at one commercial bank said.

The Zambian kwacha ZMW= is likely to remain under pressure
against the dollar due to a limited inflow of hard currency into
Africa's second-largest copper producer.
At 0907 GMT, commercial banks quoted the kwacha at 10.8900
per dollar, weaker than a close of 10.7000 per dollar a week
"Momentum remains to the upside as dollars in the market
remain scarce," the Zambian branch of South Africa's First
National Bank (FNB) said in a note.

Ghana's cedi GHS= could rally against the dollar as
corporate demand for dollars declines, while regular central
bank sales continue, an analyst said.
The local unit, which had been under pressure this month
mainly due to repatriation of dollars by international
companies, began to regroup this week. It was trading at 3.88 to
the dollar at 1130 GMT, up from 3.9275 last week, according to
Reuters data.
"The cedi is likely to continue its rally as demand remains
weak and traders and institutions are given little or no reason
to buy and hold the dollar," analyst Joseph Biggles Amponsah

The Ugandan shilling UGX= is likely to strengthen, lifted
by a central bank mop up of 657 billion shillings ($196.47
million) worth of excess liquidity and subdued appetite for hard
currency from firms.
At 0930 GMT, commercial banks quoted the shilling at
3,344/3,354, little changed from last Wednesday's close of
3,340/3,350. Last Thursday was a national holiday in Uganda and
markets were closed.
"The one week repo and also low interest in the dollar
should help give (the shilling) considerable support," said a
trader at a leading commercial bank.

The Tanzanian shilling TZS= is expected to trade in a
stable range or appreciate marginally in the days ahead,
underpinned by a slowdown in demand for U.S. dollars.
Commercial banks quoted the shilling at 2,188/2,198 to the
dollar on Thursday, weaker than 2,187/2,197 a week ago.
"We expect to see some demand for the shilling as we
approach the end of the month because of the end of the current
government fiscal year," said William Francis, a dealer at
Commercial Bank of Africa Tanzania.

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