Currency retailers and experts have said the naira will trade slightly below 500 per United States dollar this week despite the commencement of the sale of foreign exchange to Bureau De Change operators by the Central Bank of Nigeria last week.
However, looking at last week’s exchange rate in which the naira was quoted at 498/ dollar at the parallel market, down from 497 on Thursday. It traded flat at 497/dollar between Monday and Wednesday, it is likely that the naira might reach cross N500/dollar this week.
The CBN had through the International Money Transfer Organisations resumed the sale of dollars to BDCs on Thursday, after stopping it for almost a month due to the Yuletide holiday.
Travelex, one of the IMTOs in the country, sold about $20m to 2,500 BDCs with each getting $8,000, the President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said.
According to a Reuters report, the naira is seen unchanged on the parallel and official forex markets in the coming days even as the IMTOs continue the sale of dollars to the BDCs this week, boosting greenback liquidity.
The naira was quoted at 498/ dollar at the parallel market on Friday, down from 497 on Thursday. It traded flat at 497/dollar between Monday and Wednesday
On the official market, commercial banks quoted the naira at 305.75 a dollar on Friday, around the same level the local currency has traded at since August last year.
“Once dollar liquidity improves in the market I see the naira trading around 380-400 a dollar in the short-term,” Gwadabe said told Reuters.
The BDC operators are quoting the naira at 399 to the dollar.
But a professor of Economics, Akpan Ekpo, said the naira might not rise above 425/dollar on the parallel market over the next one year, even if crude oil price and production went up further.
Meanwhile, the Kenyan shilling is seen trading broadly stable in the coming days, helped by tight local currency liquidity.
The Zambia’s kwacha is expected to firm this week on improved currency inflows from a Treasury bill auction.
However, the Tanzanian shilling is expected to come under continued pressure against the US dollar in the days ahead, weighed down by a surge in demand for greenbacks from the energy sector and a slowdown in inflows.
Reuters reported that the Ghana’s cedi could stabilise in coming weeks on expected forex inflows for the purchase of a five-year 600m cedi ($138m) domestic bond at the end of the month and plans by the central bank to auction $120m of cocoa loans to banks.
The local unit had been fairly stable since December but came under pressure last week on surging dollar demand by local businesses.
The Ugandan shilling is expected to stay within a stable range over the coming days, helped by a mop up of 211bn shillings ($58.69m) of excess liquidity by the central bank and by commercial banks trimming their positions.
“We’re seeing some banks unwinding positions … and the removal of excess liquidity, I think we’ll see some support from these two (factors) ,” a trader at a leading commercial bank said.
