NAIROBI, April 18 The Kenyan shilling is
expected to climb against the dollar next week due to hard
currency inflows from overseas investors into government
securities, which have attractive yields.
The Kenyan shilling is expected to strengthen further
in coming days on the back of foreign investors buying
government bonds to lock in high yields.
Traders said the shilling, which is 2.9 percent stronger so
far this year, is poised to reach 83.20 to the dollar, a level
it has not attained since May last year.
"Next week we've bonds on sale that might attract foreign
investors due to high yields," said John Muli, a trader at
African Banking Corporation.
The central bank of Kenya is scheduled to auction five-year
and 15-year Treasury bonds worth up to 25 billion shillings
($298.69 million) on April 24.
Debt yields rose in the run-up to the presidential election
on March 4 as concerns that violence seen after the previous
vote five years before would be repeated led investors to demand
higher returns. They started edging down after the latest vote
passed off peacefully.
The Ugandan shilling is expected to be stable against
the dollar in the week ahead although high liquidity in the
money markets could put it under mild pressure.
At 0929 GMT, commercial banks quoted the currency of east
Africa's third-largest economy at 2,575/2,585, weaker than last
Thursday's close of 2,550/2,560.
The central bank bought dollars over two sessions earlier
this week, helping to halt a month-long climb by the shilling,
which is still up by 4.5 percent against the U.S. currency in
"Because of high shilling liquidity we might see commercial
banks covering short positions, which might bend the shilling a
little on the depreciation side," said Ali Abbas, a trader at
Crane Bank. "But overall the shilling is likely to remain in a
stable position..., probably between 2,540-2,590 because
underlying demand by private sector is weak."
The Tanzanian shilling is expected to be stable to
slightly firm against the dollar next week, helped by a
liquidity squeeze in the money markets.
Currency traders in Dar es Salaam quoted the shilling at
1,626/1,636 against the dollar on Thursday, weaker than
1,622/1,627 a week ago.
Market participants said the shilling was likely to trade in
a 1,620-1,630 range over the coming days. The Central Bank of
Tanzania said on its website that it had traded $24.2 million on
the interbank foreign exchange market over the past week.
Ghana's cedi is expected to decline marginally
against the dollar next week on rising greenback demand, traders
said. The local unit, which declined marginally versus the
greenback earlier in the week, fell to 1.975 on Thursday at 1300
GMT from the day's open of 1.9505.
The Nigerian naira is projected to depreciate
further next week as a dollar shortage continues in the face of
strong demand from importers, traders said.
The local unit was trading at 158.78 to the dollar on the
interbank market on Thursday, weaker than the 158.40 level it
closed at the previous day. Traders said the local unit of Exxon
Mobil sold $25 million to some lenders on Thursday, but
it was not sufficient to calm the market.
Nigeria's central bank sold a total of $498 million at its
two foreign exchange auctions this week. But dealers said some
importers whose bids are not eligible for the official window
patronise the interbank, driving up demand for the dollars.
The Zambian kwacha is likely to be under pressure
from the dollar next week due to falling copper prices and slow
global economic recovery, prompting investors to move away from
risky emerging market currencies. At 1143 GMT, commercial banks
quoted the currency of Africa's top copper producer at 5.345
from 5.355 per dollar a week ago.
(Reporting by Kevin Mwanza, Fumbuka Ng'wanakilala, Elias
Biryabarema, Chris Mfula, Oludare Mayowa; Editing by Duncan
Miriri and Mark Heinrich)