The Kenyan shilling is expected to trade in a narrow range against the dollar in the next week to Wednesday, while the Ugandan and Tanzanian currencies are seen weakening, traders said.
KENYA Kenya's shilling was forecast to trade in a narrow band with little activity expected. The commercial banks quoted the local currency at 76.00/10 per dollar, compared with last Wednesday's close of 76.35/45. Traders said they saw it trading in the 75.70-76.20 range in coming days. "We might just see it staying in this range. I don't see any inflows coming in or anything. It's just one or two people," said Kalpesh Solanki, a trader at Ecobank.
Traders said the shilling gained ground during the week, helped by dollar proceeds from sectors like agriculture. "We have heard that the tea guys came to the market today (Wednesday). I think most corporates are not in the market," said a senior trader at one commercial bank.
TANZANIA The Tanzanian shilling looked set to weaken slightly, undermined by demand for the dollar from the telecoms sector. Commercial banks quoted the local currency at 1,350/1,355 to the dollar, compared with 1,340/1,345 at last Wednesday's close.
Traders forecast the shilling was likely to trade in the 1,360-1,370 range. "The problem is we're not getting a lot of inflows. There is a clear possibility that by the end of next week, the shilling will be at 1,370 levels," said Shafran Hirji, a trader at Stanbic Bank Tanzania.
Traders expect dollar demand from sectors like telecoms to slightly weaken the shilling, which has central Bank of Tanzania (BoT) has cushioned by selling US currency.
"We haven't seen much demand coming in and the BoT has been intervening in the market," said Esther Manase, a trader at Standard Chartered Bank Tanzania. "We expect to see the shilling easing up a bit next week... There will likely be more demand for dollars from the telecoms sector." Between last Wednesday and Tuesday, central bank traded $23.5 million on its Interbank Foreign Exchange Market, according to data on its website.
UGANDA The Ugandan shilling was seen weakening due to a rise in demand from interbank and from corporate clients. Leading commercial banks traded the local currency at 1,960 /1,965 per dollar compared with 1,957/1,962 a week ago.
Currency traders said end-month dollar flows from non-governmental agencies and the agriculture sector were outmatched by the available demand. Traders said they saw the shilling trading in the 1,945-1,970 range in the days ahead.
"The local unit should hold steady at the current levels with a possibility of a marginal depreciation," said another trader with a commercial bank. The bank will on Wednesday auction a 10-year Treasury bond worth 50 billion shillings.