Nigeria’s currency could strengthen further in the coming days as foreign exchange inflows from investors, exporters and oil companies continue to support the market, traders said Thursday.
The naira has posted gains this week amid improved dollar liquidity and moderate demand pressures, with analysts pointing to attractive yields in Nigeria’s financial markets as a key driver of inflows.
The currency traded at around 1,356 naira to the U.S. dollar on the official market on Thursday, compared with 1,374 a week earlier.
On the parallel market, commonly referred to as the street market, the naira exchanged at about 1,404 to the dollar.
Market participants said foreign portfolio investment and increased foreign exchange sales by exporters and oil firms were helping stabilise the currency.
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“We may see further rally,” one trader said, adding that relatively high yields in Nigeria continue to attract foreign investors seeking returns.
Nigeria has faced prolonged pressure on its currency in recent years due to dollar shortages, inflation and declining investor confidence, prompting authorities to introduce reforms aimed at improving foreign exchange market transparency and liquidity.
The country’s central bank has pursued tighter monetary policy and exchange-rate reforms to attract capital inflows and reduce distortions between official and parallel market rates.
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Elsewhere in Africa, regional currencies showed mixed outlooks amid varying pressures linked to energy costs, foreign exchange demand and central bank actions.
In Kenya, the shilling was expected to remain broadly stable.
Commercial banks quoted the Kenyan currency at around 129.20 to the dollar, little changed from the previous week.
Traders said the Central Bank of Kenya had initially sold dollars earlier in the year to support the shilling during heightened geopolitical tensions in the Middle East, but had more recently resumed buying dollars to rebuild reserves.
Meanwhile, Ghana’s cedi was expected to weaken slightly due to persistent demand for foreign currency from corporate importers, particularly in the energy and manufacturing sectors.
The cedi traded at about 11.24 to the dollar, compared with 11.19 a week earlier.
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Traders said elevated global oil prices and limited foreign exchange liquidity continued to pressure the Ghanaian currency despite periodic central bank interventions.
In Uganda, the shilling was forecast to remain relatively stable ahead of the central bank’s monetary policy meeting scheduled for next week.
Dealers said market activity was subdued as investors awaited guidance from the Bank of Uganda on interest rates and inflation management.
The Ugandan shilling traded around 3,750 to the dollar on Thursday.
By contrast, Zambia’s kwacha was expected to remain under pressure due to strong demand for dollars, especially for energy-related imports.
Commercial banks quoted the kwacha at around 19.19 to the dollar, weaker than the previous week’s level of 18.99.
Analysts said limited hard-currency supply and rising import demand continued to weigh on Zambia’s exchange rate.
Across the region, traders said global oil prices, geopolitical uncertainty and central bank policy responses remain key factors influencing African currency markets in the short term.
