Kenyan, Zambian currencies to make gains, Uganda’s to weaken

The Kenyan shilling and Zambia’s kwacha are set to make gains against the dollar, while the currencies of Tanzania and Ghana are forecast to remain stable.

KENYA

The Kenyan shilling is expected to strengthen in the coming week due to decreased demand for dollars from routine buyers, traders said.

Commercial banks quoted the shilling at 101.30/50 per dollar on Thursday, from a close of 101.00/20 a week ago.

“A lot of the active buyers cleared their obligations. We are expecting it to strengthen and see what the new level will be,” said a senior trader from a Nairobi-based commercial bank.

TANZANIA

The Tanzanian shilling is expected to trade in a tight range in the coming week due to a balance between demand for dollars and supply in the market, traders said.

Commercial banks quoted the shilling at 2,276/2,286 to the dollar on Thursday, compared with 2,282/2,287 a week ago.

“As long as supply is not outweighed by demand, the shilling is probably not going to strengthen nor weaken next week and will maintain its current stable momentum,” said a trader at the Commercial Bank of Africa.

GHANA

Ghana’s cedi is seen stable within its current range, with dollar inflows matching demand by local businesses, analysts said.

The local unit, which was fairly stable in the first quarter, came under pressure this month, touching 4.7 to the dollar by mid-morning on Thursday, from 4.64 a week ago and down around 3 percent since January.

“We expect the cedi to see some stability in the week ahead on expected inflows including central bank intervention,” said currency analyst Raphael Adubila.

UGANDA

The Uganda shilling may weaken past a psychological level of 3,800 over the next one week, if the central bank does not intervene to soak up soaring demand for dollars from manufacturing and energy importers.

At 1125 GMT, commercial banks quoted the shilling at 3,770/3,780, weaker than last Thursday’s close of 3,735/3,745. The shilling has been posting losses over the last few days.

“There’s high demand from importers and the sentiment is that if the central bank doesn’t come in, the unit will hit or cross 3,800 level,” said Faisal Bukenya, head of treasury at Exim Bank.

ZAMBIA

The kwacha is likely to hold on to its gains next week as exporters sell dollars in anticipation of further appreciation by the local currency.

On Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 10.3100 per dollar from a close of 10.3700 a week earlier. “In the week ahead, we could also see some panic selling of dollars for fear of being left behind, which will give the local unit some much-needed support,” the local branch of South Africa’s First National Bank (FNB) said in a note.

Source: Reuters

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