Naira to Take Cue From MPC Decision Next Tuesday

• Naira to Take Cue From MPC Decision Next Tuesday

The naira is expected to trade little change against the United States dollar next week as investors await the Central Bank of Nigeria’s Monetary Policy Committee decision on interest rate on Tuesday.

After its two-day bi-monthly meeting held on Monday and Tuesday, the CBN Governor, Mr. Godwin Emefiele, said the committee would announce its policy decisions on September 26.

Although Bloomberg survey showed that the policymakers would leave all the key monetary policy instruments unchanged, analysts said the MPC decisions could affect portfolio inflows and currency market liquidity.

At the Investors and Exporters FX Window, the naira traded at around 360/ dollar on Thursday.

However, investors have been offering to sell the United Sates currency at N365, close to the black market rate of 367.

On the official market, the naira was quoted at 306/dollar, a level at which the CBN has been selling $500,000 daily to lenders to clear matured letters of credit.

A Reuters poll predicted that the Monetary Policy Rate would stay on hold at 14 per cent.

Meanwhile, the Kenyan shilling is expected to be little changed next week on concern the central bank might intervene in the market. The Zambian kwacha may strengthen against the dollar.

The Zambian kwacha is likely to strengthen next week with the supply of dollars improving as companies prepare for tax payments and other local currency month end obligations.

“We are likely to see some good performance ahead, supported largely by conversions for taxes,” the local branch of South Africa’s First National Bank said in a note.

The Ugandan shilling is expected to strengthen over the next few days amid weak demand and inflows from offshore investor. The central bank is due to sell Treasury bonds of three- and 10-year tenors on October 4, and a trader from a leading commercial bank said healthy participation by offshore investor was likely, boosting dollar supplies.

The Tanzanian shilling is expected to remain stable over the next week, helped by end-of-month hard-currency inflows from the mining sector and other foreign investors.