Kenyan shilling seen hurt by strong dollar appetite

NAIROBI: The Kenyan shilling is seen weaker on sharper dollar appetite in the coming week, while the Zambian Kwacha may also lose ground on rising hard currency demand.

Kenya

Kenya's shilling is expected to be under pressure from dollar demand from importers next week, traders said.

Commercial banks quoted the shilling at 110.60/80 to the dollar, compared with last Thursday's close of 110.40/60 per dollar.

"The shilling remains under pressure and now with global oil prices ticking up, it does not look like it (the pressure) is going to ease any time soon," said a trader at one commercial bank.

"The real level should be higher, but the central bank tends to threaten you if you put it higher and so there is a lot of unfulfilled demand," he added.

Kenyan currency seen firming, Zambia, Uganda's to soften

Nigeria

Nigeria's naira is seen firmer on the black market next week as dealers hoard the local unit while they weigh the impact of the planned launch of the country's digital currency, traders said.

The naira firmed to 573 against the dollar on the unofficial market, from a low of 577 naira a week ago, while the unit was quoted at 410.50 naira on the official market, broadly in a range held since June.

The central bank is yet to set a date for the launch of its digital currency "e-naira" after it postponed the plans last week.

Retail currency operators have faced low dollar supply after a July central bank clamp-down on bureau de change operators in an attempt to channel demand away from unofficial sources, to support the naira.

Tanzania

Tanzania's shilling is expected to hold steady next week, drawing support from hard currency inflows from exporters in sectors like mining and agriculture.

Commercial banks quoted the shilling at 2,300/2,310 on Thursday, against 2,305/2,315 recorded a week earlier.

"We expect to see more support for the shilling in the near term, driven by inflows from gold and agricultural exports," said Terry Karanja, a treasury associate at Nairobi-based FX trading firm AZA.

Uganda

The Ugandan shilling is seen trading with a weakening bias in the coming days on the back of a rebound in appetite for hard currency from importers and players in the interbank market.

At 0932 GMT commercial banks quoted the shilling at 3,560/3,570, compared to last Thursday's close of 3,535/3,545.

"There's been quite elevated appetite among importers and in the interbank which I see keeping the shilling on the higher (weaker) side," said an independent foreign exchange trader.

Zambia

The kwacha will likely post further losses against the dollar in the coming week as demand for hard currency continues to outweigh supply.

On Thursday, commercial banks quoted the currency of Africa's second largest copper producer at 17.0266 per dollar, versus 16.7250 at the close of business a week ago.

"Supply of forex on the market still remains very low while demand stays elevated," Access Bank said in a note on Thursday.