Most African currencies are seen softer next week, with Kenya's shilling eyeing a three-year low on end-month dollar demand and Ghana's cedi wilting in the face of appetite for greenbacks. Nigeria's naira is seen steady.
"The shilling could hit the 104 level next week due to end-month corporate demand," a trader at one commercial bank said. However, the shilling's drop was cushioned by cautious trade on concerns that the central bank could sell dollars into the market, boosting the local currency and players were therefore not sitting on long dollar positions, the trader said.
"We expect the shilling to remain at the same current levels next week as we are approaching the end of the month due to dollar sales from corporates," said Theopistar Mnale, a dealer at TIB Development Bank. "The market has been quiet, with subdued demand for dollars at the moment."
Bagambe said, however, the central bank was likely to intervene if the shilling hit 3,600 level to the greenback as that level was likely to trigger a panic dollar buying among interbank players seeking to build long dollar positions.
The naira was trading at 210 to the dollar at the parallel market on Thursday compared with 221 last week. The currency traded at 199.50 to the dollar on the interbank market, but was seen reaching the 197 peg set by the central bank in February. "The naira has started to record some gains especially at the parallel market this trend is likely to be sustained barring any significant drop in oil prices," Bismarck Rewane, chief executive of Financial Derivatives consultancy said.
"We expect the cedi to continue in the same direction, recording a marginal loss as the supply side remains stale," Joseph Amponsah, currency analyst at Dortis Research said.
At 1206 GMT, commercial banks quoted the currency of Africa's second-largest copper producer at 8.1300 to the dollar from 7.8350 a week ago. "Mining companies are not coming into the market with dollars because of low copper prices and there is also a huge component of speculative buying of dollars," a trader said.