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Naira to remain flat against dollar on slow growth

By on April 26, 2016

The naira is expected not to rise or fall significantly at the parallel and official foreign exchange market as the economy slows and demand for foreign exchange eases after President Muhammadu Buhari’s delayed signing of the 2016 budget.

The local currency was trading around 322 against the dollar at the parallel market on Friday, the same level as last week, and held steady around the official peg of 197.

“Some important decisions on investment and economic issues are being held back because of the continued delay in the implementation of the fiscal policy for this year,” a forex dealer told Reuters.

Zambia’s kwacha is expected to come under pressure next week after a credit ratings downgrade, while several other African currencies are likely to hold steady.

The kwacha is expected to remain under pressure against the dollar next week due to increasing demand for the US currency and following Zambia’s rating downgrade by Moody’s.

Kenya’s shilling is likely to face some pressure next week from the usual demand for dollars from companies seeking to meet end-of-month payments.

The Ghana’s cedi is expected to remain flat in the week, with traders citing adequate dollar supply to meet corporate demand.

The Tanzanian shilling is expected to hold steady with any demand from importers for dollars met by companies seeking shillings to make regular tax payments.

The Ugandan shilling is expected to strengthen next week, helped by inflows of foreign exchange and weak economic activity that is limiting corporate demand for dollars.

 

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