African currencies week ahead: Kenya’s shilling to ease, Nigeria’s naira to hold steady

NAIROBI: Kenya’s shilling is expected to weaken against the US dollar in the next week to Thursday, while Uganda’s shilling and Zambia’s kwacha will hold steady, traders said.

KENYA — The Kenyan shilling is seen easing, on strong dollar demand from general merchandise importers and manufacturers.

Commercial banks quoted the shilling at 109.75/109.95, compared with last Thursday’s close of 109.55/109.75.

“We expect the shilling to remain under pressure due to an end of month increase in demand from the energy sector and manufacturing as well as general importers,” said a trader at one commercial bank.

UGANDA — The Ugandan shilling is seen trading in a broadly stable range on the back of a slowdown in demand from foreign-owned corporates.

Commercial banks quoted the shilling at 3,665/3,675, per dollar compared with last Thursday’s close of 3,660/3,670.

“In last couple of weeks foreign-owned corporates were in the market because it is dividends season but I think that demand is getting exhausted,” said an independent foreign exchange trader in the capital Kampala.

The local currency, he said, would likely oscillate in the 3,655-3,685 range.

TANZANIA — Tanzania’s shilling is expected to face minor pressure next week due to economic activities slowing as the East African nation mourns the death of President John Magufuli on Wednesday.

Commercial banks quoted the shilling at 2,314/2,324 on Thursday, the same levels as last week’s close.

NIGERIA — The naira is seen flat in the coming week as dollar shortages persist and traders bid for the currency with a range on the spot market in an attempt to fill their order book.

The currency was quoted at 485 per dollar on the black market on Thursday, the same level it was quoted at last week.

It traded with a range of 407 to 410 naira on the spot market but remained flat on the official market backed by the central bank at 381 naira since last July.

Nigeria’s central bank governor this week said the economy needs to be given a chance to reset and diversify, addressing foreign exchange management concerns raised by the World Trade Organization.

ZAMBIA — The kwacha will likely continue trading within the current range against the dollar supported by month-end hard currency sales.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 21.9800 per dollar from a close of 21.9450 last Thursday.