AFRICA FX Zambian Kwacha seen under pressure, Kenyan shilling firm

LUSAKA: Zambia's currency will likely continue trading on the back foot against the US dollar next week as Kenya's firms and Tanzania and Uganda's hold steady.

ZAMBIA

The kwacha is expected remain under pressure against the dollar next week as demand for hard currency continues to surpass supply. On Thursday, commercial banks quoted the currency of Africa's second largest copper producer at 21.5200 per dollar from a close of 21.4447 a week ago. "Inflows from exporters have been low and importer demand remains high," one commercial bank trader said. KENYA

Kenya's shilling is expected to remain bullish as it strengthened against the dollar amid reduced demand from the energy sector and improving inflows from exports and remittances.

Commercial banks quoted the shilling at 109.30/109.50 to the dollar, compared with last Thursday's close of 109.70/109.90.

"The outlook for the week we may see the shilling trade range-bound at about 109 flat, as there isn't much demand with inflows pushing the shilling stronger," a trader at one commercial bank said.

A second trader said there was a bit more supply of dollars into the market, with demand starting to creep in but they expected the shilling to stay stable for the week ahead.

TANZANIA

Tanzania's shilling is expected to hold steady next week, underpinned by inflows from foreign direct investments and agricultural exports.

Commercial banks quoted the shilling at 2,314/24 on Thursday, unchanged from last week's close.

Terry Karanja, a treasury associate at AZA, a Nairobi-based FX trading firm, said they expected the shilling to draw support from "foreign investment in the economy and inflows from agricultural product exports."

"Good weather patterns in Tanzania and the government's support of farmers by helping them look for new markets is... likely to improve tea and coffee exports."

UGANDA

The Ugandan shilling is seen trading stable as planned mid-month tax payments by corporate firms curb appetite for hard currency.

At 1131 GMT commercial banks quoted the shilling at 3,660/3,670, unchanged from last Thursday's close.

"Appetite will be limited because most corporates will be settling their mid-month taxes," said a trader at one of the commercial banks in the capital Kampala.