African currencies week ahead: Uganda's shilling and Zambia's kwacha to strengthen

Uganda's shilling and Zambia's kwacha are both expected to strengthen slightly against the US dollar in the next week while Kenya's shilling and the Nigerian naira will hold steady, traders said.

KENYA - The Kenyan shilling is expected to remain stable in the week ahead, with commercial banks quoting the currency at 100.85/101.05 per dollar, compared with 100.95/101.15 at last Thursday's close.

"There could be a rise in demand with the new month around the corner but there is ample dollar supply in the market," said a trader for one commercial bank.

UGANDA - The Ugandan shilling is seen trading with a strengthening bias on the back of month-end hard currency inflows from non-governmental organisations looking to pay salaries and other expenses.

At 0805 GMT commercial banks quoted the shilling at 3,670/3,680, unchanged from last Thursday's close.

A trader at a leading commercial bank said the market was expecting flows of hard currency from charities and some commodity exporters that typically come in the last days of the month. "The local currency will probably move up a little (strengthen) on the back of that," he said. The local currency, he said, is likely to swing in the 3,650-3,670 range in the coming week.

ZAMBIA - The kwacha is likely to make some marginal gains against the US dollar as companies buy the local currency to meet month-end obligations.

On Thursday commercial banks quoted the currency of Africa's second-largest copper producer at 14.5000 per dollar, against a close of 14.6250 a week ago. "It is biased towards a bit of appreciation because corporates are preparing to pay salaries and other month-end obligations," a senior commercial bank trader said.

NIGERIA - Nigeria's naira is seen stable next week as traders await the result of a central bank treasury auction on Wednesday which could impact market liquidity, traders said. The naira was quoted at around 361 to the dollar on Thursday, the same level it fetched in the over-the-counter market last week. The currency was quoted at 306.95 on the official market, supported by the central bank.

Traders said the market has been on bid this week but that dollar sales by exporters has provided some support. "People are looking to buy between 361 and 362.5 but with the result of the OMO sales we may see improved flows," one trader said.