African currencies week ahead: Kenya, Tanzania shilling, Zambia kwacha to be stable

NAIROBI: The Kenyan and Tanzanian shillings are expected to hold steady against the dollar in the next week to Thursday, as will Zambia's kwacha, traders said.

KENYA - The Kenyan shilling is expected to remain steady amid increased dollar demand from merchandise importers and manufacturers, traders said.

Commercial banks quoted the shilling at 106.40/60 per dollar, compared with 106.35/55 at last Thursday's close.

"We've seen businesses opening up that's what's causing the demand ... the government has received a lot of inflows for Covid-related support," said a senior trader from one commercial bank.

UGANDA - The Ugandan shilling is likely to trade little changed amid a general slump in demand and inflows from charities.

Commercial banks quoted the shilling at 3,732/3,742, compared to last Thursday's close of 3,720/3,730.

A trader at one of the commercial banks said appetite for hard currency among importers was subdued amid a coronavirus-induced drop in consumer spending.

TANZANIA - Tanzania's shilling (TZS) is expected to hold steady due to the lower pressure from oil and manufacturing importers.

Commercial banks quoted the local currency at 2,310/20 on Thursday, the same levels recorded a week earlier.

"We forecast the shilling to be stable next week. With historically lower oil prices and reduced cost of production increasing output, we expect less pressure on the exchange rate," a trader said.

NIGERIA - Nigeria's naira is likely to trade unchanged as the central bank considers unifying its multiple exchange rates to ease dollar shortages that have plagued businesses and investors for months, traders said.

The naira was quoted at 387.08 on the over-the-counter spot market, traded by investors on Thursday, as against 361 on the official market, backed by the central bank, reflecting the growing pressure on the currency.

The central bank has been rationing forex supplies to protect its reserve to boost the naira. The policy has created shortages on the money market, funnelling demand to the black market, where the naira traded at around 455 on Thursday.

On Wednesday the central bank said it will work towards the gradual unification of exchange rates across all forex windows.

ZAMBIA - The kwacha is likely to continue trading within the current levels against the dollar, supported by month-end hard currency conversions to meet salaries.

Commercial banks quoted the local currency at 18.100 per dollar from a close of 18.2140 a week ago. "There is unlikely to be much change even going into next week because we have no major events," one commercial bank trader said.