Traders expect Kenya's shilling to weaken against the dollar in the week ahead, while Zambia's kwacha is forecast to strengthen.
KENYA - The Kenyan shilling is seen coming under pressure due to excess liquidity in the local money market and increased demand from merchant importers, traders said. Commercial banks quoted the shilling at 102.90/103.00 per dollar, compared with 101.80/90 at last Thursday's close. "There is excess shilling liquidity in the market so banks can afford to buy dollars... also there is demand from importers bringing in goods ahead of the festive season," said a senior trader from one commercial bank.
UGANDA - The Ugandan shilling is seen trading in a stable range, with subdued appetite for hard currency from importers. Commercial banks quoted the shilling 3,730/3,740, compared with last Thursday's close of 3,745/3,755. A trader at a leading commercial bank said players expected demand, especially from bulk importers, to remain flat as most have already met their hard currency needs. "For the remainder of the year, I don't expect any major upward movement on the demand side," he said, adding he forecast it to trade in the 3,725-3,750 range in the next few days.
ZAMBIA - The kwacha is expected to firm, supported by companies selling dollars as the end of the year nears. Commercial banks quoted the currency of Africa's second-largest copper producer at 11.9000 per dollar, from a close of 11.7380 a week ago. "We anticipate the kwacha to get support from corporates closing the books and thus sell off some dollar holdings," Zambia National Commercial Bank (ZANACO) said in a note.