Kenya's shilling may well hit a record low next week due to increased dollar demand from maize importers. Uganda's and Tanzania's currencies are also likely to come under pressure.
KENYA Kenya's shilling is expected to fall beyond a June 7 record low of 87.85 against the dollar, pushed down by dollar-buying from maize millers after the Finance Minister zero-rated duty on maize imports in this week's budget. Commercial banks quoted the shilling at 87.60/70 against the dollar, weaker than 86.95/87.05 at last Thursday's close, when it fell 1.43 percent intraday.
"There is a chance that the shilling may recover from the present low ranges. However we will be keenly watching if demand for the dollar picks up, especially from grain millers," said Mwambu Malamba, a senior trader at Commercial Bank of Africa.
UGANDA Uganda's shilling could weaken toward a record low on panic dollar-buying after the unit broke its key psychological level of 2,400 against the greenback, traders said. It closed at 2,400/2,405 versus the dollar on Wednesday, the same day as the country unveiled a pro-growth budget. Thursday was a public holiday.
"I think it could hit levels of 2,420 next week if the central bank doesn't intervene and sell dollars," Faisal Bukenya, a trader with Barclay's Bank Uganda, told Reuters.
TANZANIA Tanzania's shilling is staring at new record lows below the psychologically key 1,600 to the dollar level due to banks rushing to cover short dollar positions. Commercial banks quoted it at 1,585/1,595 against the dollar, weaker than 1,532/1,538 a weak ago.
ZAMBIA Zambia's kwacha is expected to remain under pressure for most of next week due to increased demand for the dollar on the back of thin foreign currency inflows. Commercial banks on Thursday quoted the kwacha 4,780 against the dollar compared with 4,770 a week ago.
However, the pressure is likely to ease due to anticipated inflows as companies buy kwacha to meet local currency obligations, he said, predicting a 4,700-4,800 trading range.
GHANA The cedi is likely to ease further after an undersubscribed 3-year bond auction on June 3. Since then it has lost 0.67 percent against the dollar, although it stabilised midweek at 1.5165/90 due to the central bank dollar selling.
NIGERIA The naira is seen losing some ground as most energy companies have ended their monthly dollar sales, although traders hope the central bank will keep pace with demand to reduce volatility. The naira was trading at 155.25 to the dollar, on Thursday, in line with its interbank close on Wednesday.
"If the central bank keeps pace with demand at its bi-weekly auction, the naira could trade below 155 to the dollar next week, otherwise it will depreciate to around 156 per dollar."
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