July 19, 2018 / 12:52 PM / 10 months ago

Kenyan shilling seen on back foot, others steady

NAIROBI (Reuters) - Kenya’s local currency is likely to come under pressure next week but the Nigerian, Zambian and Ugandan currencies should remain stable.


The Kenyan shilling KES= could come under pressure against the dollar in the coming week due to month-end importer demand amid excess liquidity in the local money market, traders said.

Commercial banks quoted the shilling at 100.65/85 per dollar, compared with 100.70/90 at last Thursday’s close.

“End month demand might start picking up ... there is a lot of shilling liquidity in the market, overnight interest rates are very low,” said a senior trader from a commercial bank.


Nigeria's naira NGN=D1 is seen stable at between 361 and 362 next week, the same level it traded at this week, as an over-the-counter trading system masks liquidity pressure on the forex market, traders said.

Traders said the naira has been supported by inflows from exporters as foreign investment trickle in. The central bank plans to start auctioning the Chinese yuan CNY= for imports from Asia to reduce demand for dollars.

On the official market, the dollar is selling for 305.85 naira, supported by central bank intervention.


The kwacha ZMW= is likely to hold within the current levels, supported by dollar conversions by companies preparing to pay salaries and other month-end obligations.

On Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.8500 per dollar, almost the same as last Thursday’s closing level of 9.8000.

“There may be a bit of appreciation because of dollar conversions but it will more or less remain within the same range,” independent financial analyst Maambo Hamaundu said.


The Ugandan shilling UGX= is seen trading with a broadly stable tone in the coming days on the back of paring of positions by commercial banks amid thinning appetite for hard currency.

At 0959 GMT commercial banks quoted the shilling at 3,735/3,745, stronger than last week’s 3,740/3,750.

Benon Okwenje, trader at Stanbic Bank, said the market was having an “interbank selling” of dollars as players go short on the American currency amid slumping importer appetite.

Okwenje said the shilling would play in the 3,730-3,750 range in the coming days.

Reporting by John Ndiso, Chijioke Ohuocha, Chris Mfula and Elias Biryabarema; Compiled by Chris Mfula; Editing by Ed Stoddard

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