East African currencies seen mixed

The Kenya shilling is likely to stay under pressure against the dollar in the next week to Wednesday, while the Tanzania unit is forecast to strengthen and the Ugandan unit is expected to weaken.
KENYA Kenyas shilling is seen under pressure as the market watches the political situation after renewed uncertainties about the resignation of Justice Minister Martha Karua and disagreements within the ruling coalition.
The commercial banks quoted the local unit at 80.35/55 to the dollar, compared with 80.05/15 at last Wednesdays close. Dealers said they expect the unit to trade in the 80.00-81.00 range against the greenback. "The market is expected to remain jittery in the days to come with small orders to buy dollars tending to cause exaggerated moves ... due to the negative political atmosphere," Bank of Africa said in its market report.
Karua quit on Monday, saying her position had become untenable. Weekend talks between the ruling coalition parties of Prime Minister Raila Odinga and President Mwai Kibaki ended in acrimony after the politicians failed to agree on the agenda.
TANZANIA Dealers forecast the Tanzanian shilling will firm, boosted by dollar inflows from the tourism sector and scant demand for the US currency. Commercial banks quoted the shilling at 1,327/1,335 to the dollar, compared with 1,330/1,340 at last Wednesdays close.
Traders said the unit will trade in the 1,300-1,340 range in the next few days. "We believe before the end of this week it might appreciate further because of a decrease in (dollar) demand in the market," said Esther Manase, a dealer at Standard Chartered Bank Tanzania.
US currency inflows from sectors such as tourism will also boost the shilling, dealers said. "Theres no real demand, but I see some inflows. Some (dollars) are coming from tourism companies," said Pascal Machango, a dealer at Kenya Commercial Bank Tanzania.
UGANDA Ugandas shilling is seen weaker, undermined by a lack of dollars to match increased demand for the US currency from corporate clients. Commercial banks quoted the shilling at 2,165/2,175 to the dollar compared with last Wednesdays close of 2,125/2,145. Dealers expect the shilling to trade in a 2,130-2,180 range in the next few days.
"We will continue to see the shilling come under pressure as long as the market is still short of dollars and the demand from corporate clients has not waned," said Denis Mushabe Mashanyu, a dealer with Standard Chartered bank. Other traders said the shilling is also likely to be dampened by Ugandas bleak economic outlook.
On Wednesday the government revised its growth forecast for 2008/09 (July-June) down to 6.2 percent from a previous estimate of 8.1 percent, due to uncertainty in the global economy. Growth for 2009/10 is seen at 6 percent.