Kenyan and Tanzanian currencies are expected to lose ground next week, while other currencies are seen relatively stable.
KENYA: Kenya's shilling could weaken on dollar demand from companies paying dividends to investors abroad, and traders said they expected the central bank to intervene if it slides. At 0950 GMT, commercial banks quoted the shilling at 94.65/75 to the dollar, weaker than 94.00/10 a week ago, and still hovering at three-year lows last hit in Nov. 2011.
"I think it will be capped at around 95.00. I believe central bank will look to support it heavily," said a senior trader at one commercial bank. The shilling has been hurt by a falling hard currency inflows from tourism after militant attacks that scared visitors away, and by a drop in horticulture earnings due to poor rain.
TANZANIA: The Tanzanian shilling has continued to set record lows against the US dollar due to strong demand from importers and could further weaken in the days ahead unless the central bank intervenes, traders said. Commercial banks in east Africa's second-biggest economy quoted the shilling at 2,010/2,020 to the dollar on Thursday, weaker than 1,930/1,940 a week ago.
"The shilling could stay at the same levels against the dollar next week or it could weaken further unless the central bank intervenes," said Mohamed Laseko, a dealer at CRDB Bank. Market participants said they expected the shilling to trade in a 2020-2,030 range over the coming days.
UGANDA: The Ugandan shilling is forecast to trade largely stable with a marginal depreciation bias fuelled by high local currency liquidity in the money market. At 1105 GMT commercial banks quoted the shilling at 2,990/3,000 stronger than 2,995/3,005 a week ago.
"The market has a lot of shillings so we might perhaps see some scattered demand and a depreciation bias," said Shahzad Kamaluddin, trader at Crane Bank.
So far this year, the local currency is 7.3 percent weaker to the greenback, largely on dollar demand by companies and investor jitters over Uganda's growing currency account deficit.
NIGERIA: Nigeria's naira is likely to be steady with central bank maintaining its tight control of the local currency and expectations of month-end dollar sales by oil companies. The naira has been flat at 197-199 to the dollar since February when the central bank introduced controls to safeguard it from depreciation after a sharp fall in global oil prices.
"We don't expect much change in the currency pricing as central bank's control remains in force," a dealer said. The central bank has been selling dollars at the interbank market at 197 on demand basis and also provides only a 2 naira margin for purchases from oil and other independent sources.
GHANA: Ghana's cedi could weaken slightly on renewed corporate demand for the dollar amid scanty offshore inflows after trading in a stable range in recent weeks as firms sold the US currency to settle their local quarterly payments.
The cedi traded at 3.88 to the dollar by midday on Thursday, from 3.87 a week before. "We are beginning to see renewed demand pressure for dollars without matching inflows, especially from offshore and this could weigh moderately on the local unit next week," Michael Akpakli of Barclays Bank Ghana said. He projected that the USD/GHS could hit 3.9000 next week.
ZAMBIA: Traders expect the kwacha to remain steady against the greenback on tight liquidity and higher copper prices. At 1005 GMT the currency of Africa's second-largest copper producer was quoted at 7.4400 per dollar from 7.3900 a week ago.
Yotam Mwale, the chief foreign exchange dealer at BancABC said the kwacha was likely to remain stable supported by reduced dollar demand after Zambia raised statutory reserves in March. "Copper prices have risen marginally and on a global scale the kwacha will be supported by a weaker dollar following a string of disappointing economic data from the US," Mwale said.
Comments
Comments are closed.