LUSAKA, July 25 (Reuters) – Kenya’s currency is likely to come under pressure against the U.S. dollar next week as those of Tanzania, Uganda and Zambia firm.
The Kenyan shilling is forecast to weaken against the U.S. dollar in the coming week due to increasing dollar demand from manufacturers and importers amid excess liquidity in the local money market, traders said.
Commercial banks quoted the shilling at 103.95/104.15 per dollar, compared with 102.95/103.15 at last Thursday’s close.
“Coming into next week, with pick up with end of month demand, I expect the shilling to continue weakening,” said a senior trader from one commercial bank.
Tanzanian Shilling is expected to slightly appreciate next week due to the inflows from corporates preparing to meet their end-of-the month obligations.
The shilling has been stable for a while with commercial banks quoting the local currency on Thursday at an average of 2,297/2,304 from 2,297/2,307 recorded last week.
“We anticipate the shilling to appreciate slightly to 2,298/2,300 levels because corporates will be buying the local currency to meet their end-of-the-month obligations especially taxes,” one commercial bank trader said.
The Ugandan shilling is seen trading with a firming tone on the back of typical end-month inflows from non-governmental organisations (NGOs) and some commodity exporters.
At 1058 GMT commercial banks quoted the shilling at 3,690/3,700, compared to last Thursday’s close of 3,686/3,696.
“Inflows from NGOs and commodity exporters will likely to the local mostly stable,” said a trader at a leading commercial bank. Uganda exports mostly coffee, gold, tea and cocoa.
He said the shilling will oscillate in the 3,680-3,700 range where it has mostly traded for several weeks.
The kwacha is seen trading within current levels against the U.S. dollar next week, with a slight bias towards appreciation due to increased hard currency supply.
On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 12.88 per dollar from a close of 12.76 last Friday.
“With month-end drawing closer, we expect U.S. dollar supply to tick up slightly as FX players convert to meet their kwacha obligations,” the local branch of South Africa’s First National Bank (FNB) said in a note. (Reporting by John Ndiso, Nuzulack Dausen, Elias Biryabarema and Chris Mfula; Compiled by Chris Mfula; Editing by Keith Weir)