The Kenyan shilling and the Nigerian naira are expected to remain stable in the next week, while the Ugandan shilling is likely to weaken.
KENYA -The Kenyan shilling is seen firm in the coming week due to tightening liquidity in the money market and inflows of dollars from offshore investors buying government debt, traders said.
Commercial banks quoted the shilling at 101.60/80 per dollar on Thursday, compared with 101.70/90 at last Thursday's close. "With the beginning of a new credit cycle, liquidity should tighten... Inflows (of dollars will come) from investors participating in the bond sale," said a senior trader at a commercial bank.
NIGERIA - The Nigerian naira is seen stable next week after it firmed against the US currency this week as foreign investors bought naira to participate in a treasury auction, boosting dollar liquidity, traders said. The naira was trading at between 362 and 363 per dollar on the over-the-counter market, strengthening from 365 earlier this week. At currency bureaus it was quoted at 362 and 306.85 on the official market, supported by the central bank.
"There's liquidity on the market. Some investors have discounted election risk while others feel the naira has strengthened and might decide to wait before coming in," one trader said.
TANZANIA - Tanzania's shilling is expected to gain next week. A trader said the central bank has asked banks to submit their dollar requirements so that it can monitor supply and demand and ensure that the market is functioning properly, potentially reducing volatility in the shilling.
Commercial banks quoted the shilling at 2,330/2,340 to the dollar, compared with last Thursday's close of 2,320/2,330. "We are seeing positive developments after the central bank move requesting commercial banks to submit their demands for dollars. This is a good move because it will reduce pressure on the shilling," a forex trader at one commercial bank in Dar es Salaam said.
"Due to the central bank intervention, we expect the shilling to gain to levels below 2,300 next week," he said.
UGANDA - The Ugandan shilling is likely to be weak in the coming days with firms expected to ramp up dollar demand after clearing their mid-month tax payments. Commercial banks quoted the shilling at 3,710/3,720 to the dollar, compared to last Thursday's close of 3,705/3,715.
"We think now that tax payments have been done, demand for dollars will go up and keep the shilling on the weaker side," said Sophie Nalubwama, a trader at Bank of Africa.
ZAMBIA - The kwacha is expected to remain range-bound in the week ahead with minimal activity expected from market participants. Commercial banks quoted the currency of Africa's second-largest copper producer at 11.8750 per dollar on Thursday, from a close of 11.9000 a week ago. "It should remain within the current levels because there are no major market-moving events," independent financial analyst Maambo Hamaundu said.