LUSAKA, Feb 27 (Reuters) - Zambia’s and Uganda’s currencies are expected to fall next week, while Kenya’s is expected to rise, traders say.
ZAMBIA The kwacha is likely to come under pressure in the coming week, weighed down by the country’s debt service obligations. On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer down at 14.9 per dollar from a close of 14.556 a week ago. “The economic fundamentals, particularly the debt position, suggest a weakening currency,” independent financial analyst Maambo Hamaundu said.
The Uganda shilling is seen trading with a weakening bias on the back of elevated demand from foreign-owned firms looking to pay last year’s dividends.
At 1029 GMT, commercial banks quoted the shilling at 3,695/3,705, compared to last Thursday’s close of 3,670/3,680. “The dividends payment season should be getting underway next month which will push demand up,” a trader at a leading commercial bank said, referring to demand for hard currency.
He said the shilling will likely weaken past the key psychological level of 3,700 as dividend-driven demand picks up. KENYA The Kenyan shilling could strengthen in the coming week due to easing month-end dollar demand from merchant importers amid inflows from horticulture exports, traders said. At 1020 GMT, commercial banks quoted the shilling at 100.85/101.05 per dollar, compared with 101.00/20 at last Thursday’s close. “The new month should be more stable... horticulture flows could come in to support a slight strengthening of the shilling,” said a senior trader from one commercial bank. TANZANIA Tanzania’s shilling is expected to hold steady next week due to the slowing demand for dollars from importers whose trade activities have been hurt by the coronavirus outbreak.
Commercial banks quoted the shilling at 2,304/2,309 on Thursday, up from the 2,310/2,315 recorded a week earlier. “The shilling will remain stable next week because it will be the beginning of the month where activities always slow down slightly and also coronavirus has slowed importation thereby reducing the demand of dollars,” a trader in one of the commercial banks in Dar es Salaam said.
Nigeria’s naira is seen unchanged next week as liquidity shortages in the currency market persist after lower yields on the debt market keep foreign investors on the sidelines, traders said.
The currency was quoted weaker at around of 364.75 naira to 365 naira per dollar on Thursday on the over-the-counter market, the same level it traded last week.
The central bank has been helping to meet some dollar demand, keeping the naira stable on the official market at 306.45.
Traders said importers preferred to wait to fill their order for the U.S. dollar rather than weakening the naira since foreign inflows have dried up amidst dwindling government reserves and lower oil prices.
Reporting by Chris Mfula, Elias Biryabarema, John Ndiso and Nuzulack Dausen; Editing by Tim Cocks and Bernadette Baum