Most African currencies are seen softer next week, with Kenya's shilling eyeing a three-year low on end-month dollar demand and Ghana's cedi wilting in the face of appetite for greenbacks. Nigeria's naira is seen steady.
KENYA Kenya's shilling is seen weakening deeper within three-year lows to trade in the 93.50 to 94.00 range against the dollar, under pressure from end-month dollar demand by importers and companies requiring to meet routine obligations. At 0730 GMT, commercial banks posted the shilling at 103.45/103.55 per dollar, from 101.80/102.00 to the dollar a week ago.
"The shilling could hit the 104 level next week due to end-month corporate demand," a trader at one commercial bank said. However, the shilling's drop was cushioned by cautious trade on concerns that the central bank could sell dollars into the market, boosting the local currency and players were therefore not sitting on long dollar positions, the trader said.
TANZANIA The shilling will likely remain steady in the days ahead on the back of expected month-end dollar sales by some mining companies and intervention by the central bank. Commercial banks quoted the shilling at 2,125/2,135 to the dollar on Thursday, stronger than 2,130/2,140 a week ago.
"We expect the shilling to remain at the same current levels next week as we are approaching the end of the month due to dollar sales from corporates," said Theopistar Mnale, a dealer at TIB Development Bank. "The market has been quiet, with subdued demand for dollars at the moment."
UGANDA The shilling is seen weakening to the dollar in the coming days on the back of strong dollar demand from the energy sector weighing against tight hard currency inflows. At 0939 GMT commercial banks quoted the local currency at 3,570/3,580, weaker than last Thursday's close of 3,545/3,555. "There's healthy demand especially from oil importers, we'll probably see slow depreciation," said David Bagambe, trader at Diamond Trust Bank.
Bagambe said, however, the central bank was likely to intervene if the shilling hit 3,600 level to the greenback as that level was likely to trigger a panic dollar buying among interbank players seeking to build long dollar positions.
NIGERIA The naira is seen unchanged on both the parallel and interbank markets on sustained dollar sales by the central bank to the bureau de change operators. Nigeria's central bank has sold dollars to bureau de change operators twice in a week in the past three weeks in a bid to increase greenback liquidity and support the local currency.
The naira was trading at 210 to the dollar at the parallel market on Thursday compared with 221 last week. The currency traded at 199.50 to the dollar on the interbank market, but was seen reaching the 197 peg set by the central bank in February. "The naira has started to record some gains especially at the parallel market this trend is likely to be sustained barring any significant drop in oil prices," Bismarck Rewane, chief executive of Financial Derivatives consultancy said.
GHANA The cedi was volatile as dollar demand by local firms continued to outstrip supply amid market uncertainty over the local currency's outlook, traders said. The cedi rallied strongly last month after slumping 25 percent in the first half of the year but has since lost all the gains. It traded at 4.1800 to the greenback at 1030 GMT from last Thursday's 4.000 close and down 30 percent since January, according Reuters data.
"We expect the cedi to continue in the same direction, recording a marginal loss as the supply side remains stale," Joseph Amponsah, currency analyst at Dortis Research said.
ZAMBIA The kwacha is expected to remain under pressure on reduced inflows of dollars from mining companies facing declining metal prices and panic buying of greenbacks.
At 1206 GMT, commercial banks quoted the currency of Africa's second-largest copper producer at 8.1300 to the dollar from 7.8350 a week ago. "Mining companies are not coming into the market with dollars because of low copper prices and there is also a huge component of speculative buying of dollars," a trader said.
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