Kenya's and Uganda's shillings are seen easing in the next week to Thursday due to importer dollar demand from energy companies, while the Zambian kwacha is seen firming, traders said.
"Because this is going to be the end-of-month week, I still believe there will be a good amount of (dollar) demand in the market. I have a lot of oil clients, a lot of general retail importers," a trader at one commercial bank said. Traders said they were also on the lookout for the central bank selling dollars. It did so on Thursday after the shilling weakened in reaction to an amended law that caps commercial lending rates.
At 0941 GMT commercial banks quoted the shilling at 3,370/3,380, weaker than last Thursday's close of 3,365/3,375. "Typically we see a jump in (dollar) demand from fuel importers and some manufacturers ... this will play out in the coming days," said a trader at a leading commercial bank.
"Government bond settlement takes place on Monday and we could see dollar conversions from last minute foreign investors. This together with corporate conversions as we draw closer to month end, could see the local unit hold ground," the Zambian branch of South Africa's First National Bank (FNB) said.
"The shilling has been stable over the past two weeks. We expect stability in the market to continue, with demand and supply being fairly matched," said Moses Kawiche, a trader at CRDB Bank.
"The government has reopened a 5-year (domestic) bond that is maturing on July 2021 and it is likely to lead to some forex inflows... I expect the cedi to regroup to the 3.9400-3.9550 range," said Barclays Bank Ghana currency dealer Jacob Brobbey.
Traders said even though the central bank continued to sell dollars daily on the interbank market, its efforts were considered weak and inadequate. The local currency was trading around 310 to the dollar on the interbank market, the same level as last week. The naira was quoted at 402 to the dollar on the parallel market compared with 397 a dollar last week. The central bank suspended nine banks from forex transactions on Tuesday for failing to remit money owed to the government, but re-admitted one of them on Thursday after it remitted the said fund.