African currencies week ahead: Zambian unit seen on back foot, Uganda’s firm

LUSAKA: Zambia’s currency is likely to continue weakening against the US dollar next week while Uganda’s gains. Kenyan, Nigerian and Tanzanian currencies are expected to hold steady.

ZAMBIA — The kwacha may come under renewed pressure against the dollar next week due to increasing demand for hard currency as business activity heightens after the Easter holidays.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 22.1100 per dollar, marginally down from 22.0750 at the close last Thursday. Zambia’s central bank last week injected $12 million into the economy, thus slowing the kwacha’s depreciation, Zambia National Commercial Bank (ZANACO) said in a weekly note.

UGANDA — The Ugandan shilling is seen trading with a firming tone on the back of conversions by offshore investors exiting Ugandan assets and weak importer demand.

At 1005 GMT commercial banks quoted the shilling at 3,645/3,655, compared to last Thursday’s close of 3,660/3,670.

KENYA — The Kenyan shilling is expected to take a pause in the week ahead after gaining ground rapidly in the previous two weeks.

At 1030 GMT on Thursday, commercial banks posted the shilling at 107.90/108.10 per dollar, having leapt from 109.20/40 the previous week. The surge in the currency has been driven by dollar inflows from investors abroad into the local government debt market, and positive sentiment following the approval of a new financing package by the International Monetary Fund.

NIGERIA — The naira is seen unchanged next week as the central bank maintains its grip on the currency and dollar scarcity blights the spot and black markets, traders said. The currency was quoted at 485 per dollar on the black market on Thursday, a level it has been stuck at since this month.

TANZANIA — Tanzania’s shilling is expected to hold steady next week and may gain more in the short to medium term as the new president pushes to improve the business environment. Commercial banks quoted the shilling at 2,314/2,324 on Thursday.