NAIROBI: The Kenyan shilling and the Zambian kwacha are expected to advance against the dollar in the week as exporters sell dollars.
KENYA
The Kenyan shilling is expected to rise to 83.50 against the dollar, helped by aid agencies and exporters selling dollars.
At 0906 GMT on Thursday, commercial banks quoted the shilling at 83.95/84.05 per dollar, 0.4 percent firmer than last Thursday's close of 84.20/40.
"The shilling is likely to gain further on good flows from usual exporters, like tea guys, and aid agencies, in the absence of demand since most customers have covered forwards," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.
Traders said the shilling, which has gained 1.4 percent this year due to a tight monetary stance, could also benefit from dollar inflows into the debt market from investors abroad.
Inflation fell firmly into single-digit territory in July, falling to 7.74 percent from 10.05 percent in June, making yields, which are still in double digits, attractive.
ZAMBIA
The Zambian kwacha is likely to gain against the dollar as companies convert dollars into the local currency to pay taxes.
At 1140 GMT on Thursday, commercial banks quoted the kwacha at 4,855 per dollar, up from 4,915 a week ago.
Market participants said companies were selling dollars ahead of tax obligations that fall due next week.
"The near term up to the end of next week should see these flows continue with the kwacha expected to hold onto and consolidate the gains made in the last two days of trading," said a trader at a commercial bank.
The Kwacha should trade between 4,800 and 4,900 to the dollar, he said.
Zambia's currency jumped to 4,640 to the dollar last month, its highest since April 2011, as a new law limiting the use of dollars continued to drive up demand for the currency of Africa's biggest copper producer.
UGANDA
The Ugandan shilling will probably be stable against the dollar over the next week, underpinned by weak dollar purchases by companies although interbank demand could put it under slight pressure, traders said.
At 1003 GMT, commercial banks in Kampala quoted the shilling at 2,475/2,485, unchanged from last Thursday's close.
Faisal Bukenya, head of market making at Barclays Bank, said demand for dollars could see the shilling weaken.
"But the underlying demand from corporates is very subdued so we're likely to trade stable in the current range of 2,470-2,490 range," he said.
The shilling has stabilised since May, defying three rate cuts by the central bank that were widely expected to weaken it.
GHANA
The Ghana cedi is expected to be relatively stable against the dollar next week due to slow corporate demand for dollars, traders said.
"There is slight improvement in cedi buying while corporate demand seems to have ebbed," Jacob Brobbey, a trader at Barclays Bank Ghana, said.
The cedi has been trading near 1.95 to the dollar for about a month, after the Bank of Ghana said it would intensify measures to stem the currency's roughly 30 percent loss against the dollar since January.
NIGERIA
The Nigerian naira is likely to be flat on the interbank market next week due to the central bank's liquidity tightening measures and a good supply of dollars in the market.
The naira was trading at 158.40 to the dollar on the interbank market on Thursday, firmer than its close of 160.10 per dollar on Wednesday.
"The market is short of naira liquidity because of the tightening measures introduced by the central bank to support the naira and this has reduced importers' capacity to bid for the dollar," one dealer said.
The central bank last week barred banks that borrow funds from its repo window from participating in foreign exchange auctions and lending to others in the naira interbank market.
Dealers said the naira will firm further this week because of an increase in dollars in the market, but will stay flat or hover within the 158.40-159.90 range next week.
TANZANIA
The Tanzanian shilling is expected to come under pressure from the dollar in the days ahead, with increased dollar demand from importers likely to cancel out any gains from inflows from cotton and coffee exports.
Commercial banks in Dar es Salaam quoted the shilling at 1,572/1,582 to the dollar on Thursday, slightly stronger than 1,573/1,583 a week ago.
"People will come into the market aggressively next week to look for dollars. This will put pressure on the shilling and we might see it trading in the 1,575-1,590 range," said Eric Chijoriga, a dealer at NBC Bank.
"The shilling has been benefiting from agricultural proceeds, especially cotton and coffee exports. But we expect it to correct from next week."
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