African currencies week ahead: Zambian kwacha seen weak, other African currencies stable

Zambia's currency is expected to remain on the back foot against the US dollar next week as those of Nigeria, Kenya and Uganda hold steady.

ZAMBIA - The kwacha is expected to remain under pressure versus the US dollar next week due to continued demand for hard currency to service debt and meet energy sector imports.

On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 14.5750 per dollar, down from a close of 14.1850 a week ago. "It is likely to remain within current levels due to hard currency demand for debt servicing, fuel imports and electricity imports," independent financial analyst Maambo Hamaundu said.

NIGERIA - Nigeria's naira is expected to be stable next week supported by exporters after hitting resistance around the 362 level as businesses wind down activities ahead of year-end, traders said.

The naira was quoted between 362 and 362.50 this week on the over-the-counter market, holding within this month's range, one trader said.

The currency was quoted at 307 on the official market, supported by the central bank. Nigeria operates a multiple currency regime.

Traders said importers were not willing to buy the dollar above the current range, which is helping keep the naira stable, with liquidity thin as foreign inflows dwindle due to a fall in debt yields.

KENYA - The Kenyan shilling is also expected to be stable in the coming week due to inflows from diaspora remittances and tightening liquidity in the local money markets offsetting end-month dollar demand from the energy sector, traders said.

Commercial banks quoted the shilling at 102.65/85 per dollar, compared with 101.25/45 at last Thursday's close.

"We could see receding pressure from importers...diaspora remittances are offering good support." said a trader from one commercial bank.

UGANDA - The Uganda shilling is seen trading in a stable range, mostly supported by inflows of hard currency from non-governmental organisations to meet operational expenses.

Commercial banks quoted the shilling at 3,695/3,705, compared to last Thursday's close of 3,680/3,690.

"Some conversions are expected from NGOs, some will be paying salaries while others will be paying some outstanding obligations before the year closes," said a trader at a leading commercial bank.

He said the shilling was likely to trade in the 3,675-3,700 range against the dollar over the next one week.