The naira is expected to remain stable across its multiple exchange rates as the currency hit a resistance level for investors and the Central Bank of Nigeria continues to intervene on the official market.
According to Reuters, the local unit has hit resistance at 360/dollar for investors as banks are not willing to bid the United States currency below that level and as foreign investors continue to buy bonds at attractive yields, boosting dollar liquidity.
On the official market the naira has been quoted at around 305 per dollar for more than three months and is expected to trade at this level next week.
The Federal Government sold bonds at an auction on Wednesday while the CBN was offering treasury securities on Thursday to draw foreign inflows.
The naira has traded flat on the parallel market at around 363, mirroring rates for investors.
Reuters reported that Kenya’s shilling is expected to trade sideways as markets await the outcome of its presidential election re-run, while the Zambian kwacha is likely to gradually weaken on the back of importer demand for hard currency.
The Kenyan shilling was trading at 103.70/90 per dollar in Tuesday’s session. Markets were closed on Wednesday and Thursday to let voters cast their votes in the election, which was marked by running battles between police and opposition supporters in some areas.
“People will be cautious but if things turn out right, we will see a major rally,” said a senior trader at a commercial bank.
He said the outcome would be clear once the final result is announced.
The Zambia kwacha is likely to remain under pressure due to sustained demand for hard currency by importers stocking up for the festive season.
At 0835 GMT on Thursday, the commercial banks quoted the currency of Africa’s number two copper producer at 10.0000 per dollar from a close of 9.7200 a week ago.