January 18, 2018 / 12:19 PM / 8 months ago

WEEKAHEAD-AFRICA-FX-Tanzania, Zambia currencies seen bearish, others stable

DAR ES SALAAM, Jan 18 (Reuters) - The Tanzanian and Zambian currencies are likely to come under pressure next week, but other African currencies should remain stable.

TANZANIA

The Tanzanian shilling may be weighed down by demand from oil and merchandise importers.

Commercial banks quoted the shilling at 2,250/2,255 to the dollar on Thursday, weaker than 2,240/2,245 a week ago.

“The shilling is under pressure due to demand from the oil sector and other importers. If the demand continues to build up, the local currency could trade in the 2,260 levels next week,” said a trader at Commercial Bank of Africa Tanzania.

ZAMBIA

The kwacha is likely to come under pressure against the dollar as the supply of hard currency dries up.

At 1115 GMT on Thursday, the currency of Africa’s second-largest copper producer was quoted at 9.8000 per dollar from last week’s close of 9.7800.

“The surge in supply we saw at the start of the year is ebbing, leading us to believe the currency may come under pressure,” one senior foreign exchange trader said.

GHANA

Central bank support is expected to keep Ghana’s cedi steady against the dollar, as the bank tries to match rising demand for dollar from both local businesses and offshore investors, analysts said.

The cedi was trading at 4.5500 to the dollar compared with 4.5490 at last Thursday’s close.

“We expect the cedi to continue its stable trend in the coming week — within the 4.54 and 4.56 band”, Raphael Adubila, Treasury officer of the Accra-based Northstar Home Finance.

UGANDA

The Ugandan shilling should trade in a stable range after the central bank sold dollars to limit the local currency’s depreciation.

At 1046 GMT commercial banks quoted the shilling at 3,625/3,635, compared to last Thursday’s close of 3,650/3,660.

“There’s a positive sentiment in the markets from central bank action, I think it will keep the shilling on the stronger side,” said Faisal Bukenya, head of treasury at Exim Bank.

KENYA

The Kenyan shilling is expected to trade in the same range against the dollar in the coming week as the market looks to a central bank rate-setting meeting on Monday for direction, traders said.

Commercial banks quoted the shilling at 102.85/103.05 per dollar, compared with 103.10/20 at last Thursday’s close.

“We’ve seen inflows from horticulture ... some direction could come out of Monday’s meeting,” said a trader from a leading commercial bank. (Reporting Fumbuka Ng’wanakilala, by Chris Mfula, Kwasi Kpodo,Elias Biryabarema and John Ndiso; Compiled by Chris Mfula; Editing by Larry King)

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