African currencies week ahead: Kenyan and Zambian units seen softening

NAIROBI: Kenya and Zambia’s currencies are expected to come under pressure next week though Uganda’s will likely firm against the US dollar, analysts and traders said. Nigeria and Tanzania’s currencies are seen holding steady.

KENYA — Kenya’s shilling is expected to face pressure next week as month-end demand for dollars from importers increases.

On Thursday, commercial banks quoted the shilling at 108.35/108.55 against the dollar compared with last week’s close of 106.95/107.15.

Kenya’s central bank on Tuesday cushioned the shilling by selling dollars in the foreign exchange market.

ZAMBIA — The Kwacha will likely remain on the back foot against the dollar next week as demand for hard currency continues to outweigh supply.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 22.2275 per dollar from a close of 22.1800 a week ago.

UGANDA — The Ugandan shilling is seen maintaining its strengthening streak on the back of some end-month hard currency inflows. At 0736 GMT commercial banks quoted the shilling at 3,605/3,615 against the dollar, compared with last Thursday’s close of 3,615/3,625.

NIGERIA — The naira is seen flat in the coming week after the central bank sold more dollars on the spot and forwards market last week to clear a backlog of demand from foreign investors seeking to repatriate profits, traders said. The currency hit a low of 422 naira against the dollar on the over-the-counter spot market on Thursday but recovered to 409.68 naira, a range it has been trading at since February.

It was quoted at 486 naira per dollar on the black market on Thursday, weaker than 482 naira it hit at the start of the week. The naira remains flat on the official market, which is backed by the central bank, at 381 naira, where it has been stuck since last July.

TANZANIA — Tanzania’s shilling is expected to hold steady next week as inflows from investors balance out demand for the dollar from energy and manufacturing importers.

Commercial banks quoted the shilling at 2,310/2,324 against the dollar on Thursday, nearly the same levels recorded a week earlier.