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The week ahead doesn’t look too good for the Kenyan and Nigerian currencies. Reuters Africa reports that both naira and shilling currencies will likely come under pressure against the U.S dollars next week.
Financial Commentary on Naira to Dollars
Thursday, July 16, 2020, the naira remained stable at N470/$1 as our earliest report shows. However, things might move around a lot for the naira in the week ahead.
Lenders are also now following the CBN directive to the process for maize imports and return the Form M. More recently, the black market rate of the naira is at 470/$1 and the new official rate adjusted by the central bank last week is 380 nairas. This rate is also close to the NAFEX rate which is at 386.
Traders say that the demand for dollars is redirecting to the black market and this is forecasted to put pressure on and weaken the naira. Dollar supplies are still slow despite the new official exchange rate for naira which unifies and eases forex deficits.
In Kenya, increased dollar demand from import merchants is likely going to weaken the Kenyan shilling according to the forecast. The country is resuming business activities and after restrictions were recently lifted.
The Ugandan market, on the other hand, is seeing more inflows of commodities and less dollar demand. This is expected to strengthen its shilling in the week to come.
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