Kenyan and Tanzanian currencies are expected to lose ground next week, while other currencies are seen relatively stable.
"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.
"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.
"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.
"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.
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.
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.