Most African currencies seen stable to firmer in week ahead

The Kenyan shilling is expected to be steady against the dollar in the week ahead supported by hard currencies sent home for the holidays by Kenyans who live abroad, while the Zambian kwacha will also be stable.

KENYA - The Kenyan shilling is seen stable in the coming week with tightening liquidity in the local money market and inflows from diaspora remittances offering support against dollar demand from merchandise importers, traders said.

Commercial banks quoted the shilling at 101.75/95 per dollar, compared with 102.65/85 at last Thursday's close.

"People are unloading their long dollar positions to fund Kenya shillings," said a senior trader from one commercial bank.

NIGERIA - Nigeria's naira could weaken next week on the over-the-counter market mainly due to a slowdown in the supply of dollars from exporters and foreign investors, traders said.

The naira eased to 362.75 on Thursday from a range of 362-362.50 where it was trading last month.

The currency was quoted at 306.95 on the official market, supported by the central bank. Nigeria operates a multiple currency regime.

"The market is tight. If the tightness continues (the currency) may weaken to 363," one trader said.

ZAMBIA The kwacha is expected to remain in its current ranges against the US dollar next week due to matching demand and supply of hard currency.

On Thursday, commercial banks quoted the currency of Zambia, Africa's second-largest copper producer, at 14.9000 per dollar, down from a close of 14.5000 a week ago.

"Demand and supply seems to be driving short term foreign exchange rate movements. We anticipate the exchange rate to be range bound," Zambia National Commercial Bank (ZANACO) said in a market note.

UGANDA - The Ugandan shilling is likely to strengthen in the coming days as demand for dollars from merchandise importers tails off.

At 0923 GMT, commercial banks quoted the shilling at 3,685/3,695, unchanged from last Thursday's closing level.

"Most importers have already met all their hard currency needs... we expect there will be very limited demand from that side," said a trader from a leading commercial bank.

TANZANIA - The Tanzanian shilling is expected to gain ground against due to a decline in pressure from importers buying dollars and an increase in hard currency inflows from cashew nut exports.

Commercial banks quoted the shilling at 2,297/2,303 per dollar on Thursday, up from 2,300/2,305 recorded a week earlier.

"We are heading to the end of the year where business always slows down. We don't expect pressure from corporates and large importers," a currency trader from one of the commercial banks in Dar es Salaam told Reuters.