East Africa's shillings are all expected to strengthen against the dollar next week as tourism revenues start to climb with the onset of the year-end holiday season and Africans overseas send money home to relatives.
KENYA Kenya's shilling is seen firming next week beyond Thursday's 11-week high due to an acute liquidity crunch and year-end dollar flows into tourism and agriculture, and from aid groups and Kenyans abroad sending money home for the holiday season.
Commercial banks quoted the shilling at 92.50/70 against the dollar, a level last touched on August 29 and more than 2 percent stronger than last Thursday's close of 94.80/95.00. "We're headed to 90 shillings per dollar," said a trader with one commercial bank. "Guys cannot hold long dollar positions in this tight market.
UGANDA The Ugandan shilling is expected to hold steady against the dollar due to low corporate demand for the greenback. Commercial banks quoted the shilling at 2,580/2,591 compared with last Thursday's close of 2600/2,610. Traders said the shilling was expected to meet resistance at 2,585 to the dollar, and find support at 2,620.
TANZANIA Tanzania's shilling is expected to extend gains against the dollar due to a slowdown in foreign exchange demand ahead of the holiday season and inflows from tourism and mining. Commercial banks in Dar es Salaam quoted the shilling at 1,695/1,705, stronger than last Thursday's close of 1,748/1,758. Traders said they expected the shilling to trade in the 1,690-1,700 range in the coming days.
NIGERIA The naira is likely to ease against the dollar as demand for the greenback from companies excluded from the official window continues to rise in the face of declining supply from energy firms. Traders said the interbank market largely depends on regular direct dollar sales by the central bank to some lenders. "We are trading cautiously today and waiting till when the central bank decides to intervene," one trader said.
GHANA Ghana's cedi is likely to hold firm due to consistent central bank intervention in recent weeks, traders said. Christopher Nettey of Standard Bank quoted the cedi at 1.6165/90 slightly down from an open of 1.6145/70. Consistent central bank intervention would keep the cedi stable despite the pressure that offshore purchasing of dollars had put on the local currency, he said. "The central bank is keeping the cedi at the 1.61 level," Nettey said. "I expect the cedi to trade between 1.61-1.6250 in the coming week."
ZAMBIA The kwacha is likely to remain stable or ease slightly against the dollar due to a scarcity of foreign exchange and the euro zone debt crisis, which has hit investors' appetite for high risk debt. Commercial banks on Thursday quoted the kwacha at 5,020 against the dollar, in line with its level a week ago.
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