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Kenya News

UPDATE 1-AFRICA-FX-Nigerian naira to weaken, debt worries seen hurting Zambian kwacha

(Adds Kenyan shilling)

LAGOS, March 3 (Reuters) - The Nigerian naira is seen extending its losing streak while the Zambian kwacha is also expected to weaken, hurt by worries over the country’s debt problems.

NIGERIA

The naira is expected to weaken on the spot market in the coming week after it dropped to a record closing low on Wednesday and the central bank last week acknowledged that the currency was trading weaker over-the-counter.

The currency was quoted at 411.10 naira to the dollar on the over-the-counter spot market on Thursday, exchange data showed.

“Majority of liquidity on the market is traded higher than the closing levels,” one trader told Reuters, adding that he anticipated the weakening streak to continue.

The spot market naira has been hitting intra-day lows since February but has remained flat on the official market backed by the central bank at 381 naira since last July. The currency traded at 480 naira on the black market on Thursday.

KENYA

The Kenya shilling is seen trading steady around the 109/110 range against the dollar in the comings days.

A trader at a commercial bank said there was “good dollar supply in the market,” that would help lend support to the local currency.

The shilling was trading 109.50/70 against the dollar at the market close on Thursday, against 109.70/90 a week ago.

UGANDA

The Ugandan shilling is seen trading within a stable range but may weaken slightly on the back of demand from foreign-owned firms looking to pay last year’s dividends to their shareholders.

At 0949 GMT commercial banks quoted the shilling at 3,655/3,665, compared to last Thursday’s close of 3,660/3,670.

“Foreign-owned corporates usually exert higher demand in March because of dividend payments so we anticipate some activity around that,” said a trader at one commercial bank.

TANZANIA

Tanzania’s shilling is expected to hold steady next week with inflows from the mining sector helping provide support.

Commercial banks quoted the shilling at 2,314/2,324 on Thursday, the same levels recorded a week earlier.

“We expect the shilling to continue to be stable next week with the supply of dollars from the mining sector... this will help match the demand,” a trader in one of the commercial banks in Dar es Salaam said.

ZAMBIA

The kwacha is seen remaining under pressure against the dollar in the coming week as demand for hard currency continues to outweigh supply.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 21.8700 per dollar from a close of 21.7455 on Thursday last week.

“The trend remains tilted towards kwacha depreciation and this is largely because of the country’s debt issues,” independent financial analyst Maambo Hamaundu said.

Zambia’s debt default has fuelled negative sentiment, hitting investment inflows and the local currency’s performance. (Reporting by Elias Biryabarema; Chijioke Ohuocha; Chris Mfula; Nuzulack Dausen. Compiled by Elias Biryabarema; Editing by Shailesh Kuber and David Evans)

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