NAIROBI: Ugandan, Zambian and Tanzanian currencies are expected to strengthen against the US dollar next week, with Nigeria's and Kenya's seen easing.
NIGERIA The naira is likely to ease next week as foreign flows into treasury bills slow and banks scramble for dollars to settle maturing futures in the local currency, traders said.
The naira was quoted at 360.50 per dollar on the over-the-counter market, a level where it traded last week. However, traders said most banks were bidding for dollars.
The currency exchanged at 360.00 at retail bureaus and 306.90 on the official market, supported by the central bank.
Traders said millions of dollars worth of naira futures have matured, adding to dollar demand pressure, while foreign investors are on the sidelines after rates fell slightly following the central bank's Tuesday treasury auction.
"The current illiquidity started two days ago and is worsening. If the tightness continues into next week (the) rate might get to 361," one trader told Reuters.
KENYA
The Kenyan shilling will be under pressure next week because of dollar demand from some energy and manufacturing companies buying dollars to meet end-month obligations, traders said.
Commercial banks quoted the shilling at 101.45/65 per dollar, compared with 101.35/55 at last Thursday's close.
"We could see a bit of last minute demand from players who had not covered their end-month obligations," said a senior trader from a commercial bank.
UGANDA
The Ugandan shilling is expected to strengthen as some non-governmental organisations (NGOs) convert hard currency holdings to pay salaries and other month-end expenses.
At 1002 GMT commercial banks quoted the shilling at 3,730/3,740, unchanged from last Thursday's close.
A trader from a leading commercial bank said the market typically receives significant inflows from such activity.
"I think we are likely to see an overall bias on the stronger side for the local unit," he said.
ZAMBIA
The kwacha may pare some of its recent losses next week as market players sell US dollars for profit at current levels.
On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 12.5000 per dollar from a close of 12.2300 on Wednesday last week.
"A race for taking profits could start for players holding dollars," the local branch of South Africa's First National Bank (FNB) said in a note.
TANZANIA
The Tanzanian shilling is seen strengthening slightly against the US dollar in the coming days, helped by a slowdown in demand for hard currency and improved inflows from the mining and tourism sectors.
At 1100 GMT on Thursday, commercial banks quoted the Tanzanian shilling at 2,300 per US dollar, down from a close of 2,298 a week ago amid expected month-end inflows from corporates seeking to offload dollars to meet obligations in the local currency.
"There is a slowdown in demand for dollars at the moment. The anticipation is that the shilling will strengthen next week as companies sell dollars to get shillings in order to pay salaries and taxes," said a trader at CRDB Bank Tanzania. ?Reuters
Comments
Comments are closed for this article.