April 18, 2019 / 1:02 PM / a month ago

WEEKAHEAD-AFRICA-FX-Most African currencies seen under pressure, Nigeria's stable

NAIROBI, April 18 (Reuters) - Kenyan, Tanzanian and Zambian currencies are likely to come under pressure against the U.S. dollar next week but Nigeria’s is seen stable.


The Kenyan shilling is seen easing against the U.S. dollar in the coming week due to hard currency demand from the manufacturing and energy sector exceeding inflows from offshore investors buying government debt, traders said.

Commercial banks quoted the shilling at 101.20/40 per dollar, compared with 100.95/101.15 at last Thursday’s close.

“Demand is mainly due to importers and corporates increasing their long dollar positions,” said a trader from one commercial bank.


The Tanzanian Shilling is expected to slightly depreciate versus the U.S. dollar next week due to anticipated hard currency demand from the construction and energy sectors as supply falls.

At 0923 GMT on Thursday, commercial banks quoted Tanzania currency at 2,298 per U.S. dollar, up from a close of 2,310 a week ago due to hard currency inflows ahead of Easter holiday.

A senior commercial bank trader said dollar supply, mainly from mining firms and corporates would reduce after the Easter holiday and demand would tick up, piling pressure on the shilling.


The kwacha is likely to remain under pressure against the U.S. dollar next week due to reduced hard currency inflows after the end of this week’s tax payments.

At 1243 GMT on Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 12.2900 per U.S. dollar, down from a close of 12.1630 a week ago.

“Pressure should mount on the kwacha next week because VAT (Value Added Tax) payments, which attracted some dollar inflows end today,” one senior commercial bank trader said.


The naira is expected to remain stable next week as ample U.S. dollar liquidity from foreign investors buying treasury bills and exporters provides support for the currency, traders said.

The naira traded at 360.50 per U.S. dollar this week, a similar level to last week. The currency was quoted at 360 at exchange bureaus and 306.95 on the official market, thanks to central bank support.

Traders say foreign investors were still buying treasury bills to lock in yields, which has helped to support the naira.

Nigeria’s information minister told Reuters that the country’s exchange rate policy is working well and the central bank is unlikely to change its multiple exchange rate regime anytime soon. (Reporting by John Ndiso, Nuzulack Dausen, Chris Mfula and Chijioke Ohuocha; Compiled by Chris Mfula; Editing by Alexandra Hudson)

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