NAIROBI: Nigeria's naira may have a bearish tone in the coming week due to tight dollar supplies, while Kenya's shilling is expected to weaken on the back of demand from energy firms.
Nigeria
The Nigerian naira could come under pressure next week on the unofficial market where it trades more freely, as outbound travel and business resume following the holidays, traders said.
The currency was steady on the week at 570 naira per dollar on the parallel market on Thursday. On the official market, commercial banks quoted the currency in a range of 409-415 against the dollar.
"I expect a bit of demand next week which could push naira down," one trader said.
Demand for hard currencies tailed off due to the holidays and as businesses closed for the year. Nigeria is battling dollar shortages brought on by low oil prices, following disruptions linked to the COVID-19 pandemic.
Kenya
Kenya's shilling is expected to ease, undermined by a resurgence in dollar demand from oil companies after a lull during the December holiday period.
Commercial banks quoted the shilling at 113.05/25 per dollar, compared with last Thursday's close of 113.00/20.
"Depending on the (dollar) demand they had put aside, they could be in back buying and the shilling continues going up (weakening). Normally in the first week, it is oil and merchandise importers," a trader at one commercial bank said.
Uganda
The Ugandan shilling is seen trading with a broadly stable tone in the coming days amid muted demand for hard currency as businesses slowly resume activities after the holiday.
At 1048 GMT commercial banks quoted the shilling at 3,540/3,550, weaker than last Thursday's close of 3,535/3,545.
"As business activity slowly picks up (dollar) appetite will build up slowly too, but I anticipate we'll remain in a broadly stable range," said an independent foreign exchange trader in the capital Kampala.
He said the shilling will likely swing in the 3,540-3,560 range in the coming days.
Zambia
The kwacha is likely to continue trading on the back foot against the dollar next week as demand for hard currency remains higher than supply.
On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 16.6320 per dollar, compared with 16.5217 a week ago.
"We expected the Kwacha to begin the new year on a mildly weaker note due to excess demand conditions in the FX market," Zambia National Commercial Bank (ZANACO) said in a note.
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