African currencies week ahead: Kenyan currency seen up, Zambia, Uganda’s to soften

NAIROBI: Kenya’s currency is likely to firm against the US dollar next week as Zambia’s and Uganda’s soften. Nigeria and Tanzania’s currencies are seen holding steady.

KENYA — The Kenyan shilling is expected to edge up against the dollar next week, driven by dollar inflows from offshore investors into local government bonds.

The shilling has been stuck at 109.55/75 per dollar in recent days due to lack of demand for hard currency, traders said, adding that the range could move up to 109.00-109.50 next week.

ZAMBIA — The kwacha will likely continue trading under pressure against the dollar next week due to sustained demand for hard currency and scanty inflows.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 21.9400 per dollar from a close of 21.9000 a week ago.

UGANDA — The Ugandan shilling is seen weakening in the next few days under the shadow of trade disputes with Kenya.

At 0904 GMT, commercial banks quoted the shilling at 3,660/3,670 against the dollar, compared with last Thursday’s close of 3,655/3,665.

Kenya has banned imports of Ugandan maize after imposing restrictions on shipments of other Ugandan exports including milk and poultry products.

NIGERIA — The naira is seen range-bound next week, supported by a central bank incentive to try to attract more diaspora inflows through official channels to shore up the currency on the black market, traders said.

The currency was quoted at 484 naira on the black market on Thursday, weaker than 480 naira last week. It traded at 408.32 naira on the spot market but remained flat on the official market backed by the central bank at 381 naira since last July.

TANZANIA — Tanzania’s shilling is expected to hold steady next week, underpinned by the low inflation rate and inflows from foreign investment.

Commercial banks quoted the shilling at 2,314/2,324 against the dollar on Thursday, unchanged from last week’s close.