African currencies week ahead: Kenyan shilling to weaken, Uganda's to be stable

Kenya's shilling is expected to weaken against the dollar in the next week, while Uganda's will be stable, traders said.

KENYA - The Kenyan shilling is seen under pressure in the coming week due to increased dollar demand from merchandise importers and some multinational companies, traders said.

Commercial banks quoted the shilling at 100.40/60 per dollar, compared with 100.35/55 at last Thursday's close.

"As we go into dividend payment period we might see the strengthening slow down," said a senior trader from one commercial bank.

UGANDA - The Ugandan shilling was seen holding steady, with the central bank's decision to keep interest rates unchanged expected to fuel favourable market sentiment.

Commercial banks quoted the shilling at 3,664/3,674, compared with last Thursday's close of 3,670/3,680.

"Most market players expected a (rate) hold, which turned out the case so overall I don't expect any major movement on either side of the market," said a trader from a leading commercial bank.

On Thursday Bank of Uganda held its benchmark lending rate at 9%.

TANZANIA - The Tanzanian shilling is expected to gain slightly due to reduced dollar demand from importers and an increase in inflows from non-governmental organisations.

Commercial banks quoted the shilling at 2,306/2,316 per dollar, the same level as last Thursday's close.

"The shilling will gain slightly ... because there are many NGOs which are in pipeline selling dollars," a trader at one commercial bank said.

NIGERIA - Nigeria's naira is seen stable next week after the central bank on Thursday offered longer-term contracts on the naira to lure more foreign inflows and buff up its dwindling dollar reserves, traders said. The naira was quoted at around 364 per dollar on the over-the-counter market, a level it has been for more than a week.

Nigeria's currency market has been on bid with little supply as foreign investors stay on the sidelines owing to lower yields on the debt market, worsened by weak sentiment over fears that the coronavirus outbreak in China would hit demand, traders said.