JOHANNESBURG, Sept 13 (Reuters) - The currencies of Kenya, Zambia and Uganda are likely to weaken next week partly due to rising demand for dollars, debt repayments concerns and subdued risk appetite as emerging markets economic woes persist.
The Kenyan shilling could weaken in the coming week due to increased demand for dollars from importers and banks after an International Monetary Fund (IMF) standby arrangement expired, traders said.
Commercial banks quoted the shilling at 100.96/101.16 per dollar, compared with 100.65/85 at last Thursday’s close.
“Its all about IMF right now. We wait and watch what IMF says,” said a senior trader from a commercial bank.
The $989.8 million standby arrangement had been secured to cushion the economy in case of unforeseen external shocks but it expired this week.
The Uganda shilling is seen weakening over the coming days, with banks scrambling to build positions as confidence in the local currency wears thin after crossing the psychological level of 3,800.
At 0916 GMT commercial banks quoted the shilling at 3,800/3,810, weaker than last Thursday’s close of 3,765/3,775.
“After crossing the psychological level of 3,800 I think we’ll be seeing some sort of panic buying in the interbank unless the central bank intervenes to restore confidence,” said Faisal Bukenya, head of treasury at Exim Bank.
Inflows were tight, Bukenya also said, adding that meant any steep surge in demand was likely to trigger faster depreciation of the local unit.
The kwacha is seen remaining on the backfoot in the coming week as investors continued to fret over the size of country’s debt and the falling copper prices.
The currency of Africa’s second-largest copper producer was at 10.3750 per dollar, compared a close of 10.2800 a week ago.
“The kwacha has shed a bit of its value due to speculation on the international metals market and some negative talk about the size of Zambia’s debt, especially its ability to service its eurobonds,” said economist at Copperbelt University Lubinda Habazoka
“So you’re maybe seeing some investors moving their assets into foreign currency.”
The IMF is concerned over high borrowing by Africa’s second largest copper producer, which is seeking a $1.3 billion loan from the global lender. (Reporting by Reporting by John Ndiso, Elias Biryabarema and Mfuneko Toyana Compiled by Nomvelo Chalumbira Editing by James Macharia)