The Kenya shilling is seen trading in a tight range against the dollar in the coming week to Wednesday, while the Tanzanian unit is expected to have mixed trade and the Ugandan currency is projected to firm.
KENYA: Kenya's shilling is expected to trade in a tight range as the market watches for any pick-up in corporate demand for the US currency. The commercial banks posted the unit at 77.90/78.10 compared with last Wednesday's close of 77.75/85.
Traders said the shilling slipped during the week due to central bank and corporate clientele buying dollars, trading in the 77.70-78.20 range. "We have not seen anything fundamentally strong to suggest we will break that range," said Chris Rwengo, head of trading at Standard Chartered Bank. "The wider range to watch is 77.50-78.50."
Peter Njuguna, head of trading at Commercial Bank of Africa, said the market will be watching to see if the traditional end-month dollar picks up in the week ahead.
TANZANIA: The Tanzania shilling is forecast to have mixed trade, holding steady and possibly easing slightly. Commercial banks quoted the local unit at 1,315/1,325 to the dollar, compared with last Wednesday's close of 1,325/1,335.
Dealers see the shilling trading in the 1,310-1,350 range in coming days, with likelihood of hovering around 1,320. "It's likely to remain range-bound. We need a significant amount of flows to break that (1,320) level. It might depreciate slightly after end-month (but) might still be supported by Bank of Tanzania," said James Rutta, a dealer at Citibank Tanzania.
Dealers said they saw little dollar demand during the week and the shilling gained due to central bank and corporate customers selling greenbacks to pay salaries and tax. Between Thursday and Wednesday BOT traded $25.85 million on its Interbank Foreign Exchange Market.
UGANDA: The shilling is projected to appreciate in coming days supported by trade among commercial banks and some end-month inflows of the US currency. Commercial banks posted the local unit at 2,240/2,250 per dollar compared with 2,255/2,265 on last Wednesday's close.
"We might see limited demand from the corporate players at these levels of 2,245/2,255, expecting the shilling to appreciate back to 2,230/2,240," Stanbic Bank said in a market report. The shilling has reversed its slide in recent days due to commercial banks unwinding their long dollar positions and offshore investors' dollar sales, dealers said.
"We are seeing some dollar sales by offshore investors who are eyeing today's three-year treasury bond auction," said Benson Kaburu, a senior dealer with Standard Chartered Bank. "A good number of commercial banks have also been short on shillings in the money market so they are selling dollars to purchase the local unit which has given it support." The central bank held an auction on Wednesday for the three-year bond, worth 50 billion shillings.
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