The Kenyan and Ugandan shillings are likely to remain under pressure against the dollar next week after falling through a series of record lows that their central banks blamed on currency speculators.
KENYA Kenya's shilling, which has hit a string of record lows in the last two weeks, is likely to remain volatile against the dollar, due to importer demand for the greenback and tight domestic liquidity, traders say. Commercial banks quoted the shilling at 90.00/30, weaker than last Thursday's close of 89.90/90.00. Traders say the shilling could fall to 92.00 due to oil and grain importers buying dollars to meet month-end demand.
UGANDA Uganda's shilling will remain under pressure after a week in which it hit two all-time lows before stabilising on the back of central bank intervention. The unit hit 2,508 to the dollar on Tuesday, prompting the central bank to sell dollars in support of the currency. It is not yet clear how much the bank sold.
Traders in Kampala predicted the currency in a 2,480-2,495 range against the dollar. It has fallen more than 7 percent against the dollar this year. The central bank says the currency is undervalued and often blames speculators when it depreciates. Its interventions are aimed at bringing the shilling to between 2,460 and 2,470, traders said.
TANZANIA Tanzania's shilling is likely to trade in a narrow range, with expected month-end dollar flows from corporates providing some stability, traders said. Commercial banks quoted the unit at 1,604/1,609, compared with 1,575/1,580 a week ago. It hit a record low of 1,610 on Wednesday. Traders said the unit was likely trade in the 1,590-1,610 range in the coming week.
NIGERIA The naira is seen broadly firmer against the dollar next week as energy companies are expected to start their month-end dollar sales. Energy firms in sub-Saharan Africa's second biggest economy sell dollars to selected lenders towards the end of the month to obtain naira for their domestic obligations. The naira was trading at 156.60 to the dollar on the interbank market on Thursday, from 156.55 at Wednesday's close. The central bank supplied $400 million at its last two bi-weekly forex auctions, which, although short of demand, helped to clear some bids in the interbank market and reduce pressure on the naira.
ZAMBIA The kwacha is likely to firm due to companies selling dollars to meet local month-end obligations. The currency of Africa's largest copper producer was trading at 4,840 to the dollar on Thursday, marginally down from 4,830 a week ago. The kwacha has traded between 4,800 and 4,600 for most of this year. During 2010 it met firm resistance at 4,600. On the few occasions it breached that level it went on to test, but failed to breach 4,550.