Kenyan, Zambian currencies seen weakening



NAIROBI, Jan 27 (Reuters) - Kenyan and Zambian currencies are expected to weaken against the U.S. dollar in the coming week while those of Uganda and Tanzania are likely to hold steady.

KENYA

Kenya's shilling KES= is expected to be undermined by increased demand from general goods importers and oil companies.

Commercial banks quoted the shilling at 113.45/65 per dollar, compared with last Thursday's close of 113.40/60.

"There is still a lot of demand coming from a lot of importers, owing to the fact that it is end-month, the oil companies and merchandise importers are starting to buy," a trader at one commercial bank said.

The shilling is just off a fresh all-time low of 113.55/75 hit on Jan. 20 and Jan. 25, according to Refinitiv data.

UGANDA

The Ugandan shilling UGX= is seen trading within a broadly stable range in the coming days on the back of typical end of month inflows amid low importer appetite.

At 0942 GMT commercial banks quoted the shilling at 3,515/3,525, unchanged from last Thursday's close.

"End of month flows should yield some support," an independent foreign exchange trader in the capital Kampala said, adding those hard currency flows will likely meet with a generally flat demand appetite.

The local unit, he said, is expected to trade between 3,500-3,520.

TANZANIA

Tanzania's shilling TZS= is expected to hold steady next week as inflows from exports match the dollar demand in the market.

Commercial banks quoted the shilling at 2,305/2,315 on Thursday, nearly the same levels recorded at last week’s close.

"We expect a better operating environment for local businesses amid a recent fall in the overall lending rates and a potential boost in exports to maintain current levels for the shilling, with scope for appreciation in the longer term," said Terry Karanja, a treasury associate at AZA, a Nairobi-based FX trading firm.

NIGERIA

The Nigerian naira is seen range-bound in the coming week, as higher oil prices provide support for the central bank to boost dollar sales, traders said.

The currency firmed to 570 naira to dollar on the parallel market NGNP= on Thursday but was steady last week at 572 naira. On the official market NGN= , it traded at a range of 411-417 naira.

Oil prices have been rising which could provide more dollar inflow for the central bank to support the currency. But the country needs to be able to maintain steady production, one commercial bank trader said.

"I don't see the naira trading outside current range," the trader said.

ZAMBIA

The kwacha ZMW= is likely to remain broadly weak against the dollar in the coming week, driven down by limited supply of hard currency.

On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer down at 17.8500 per dollar from 17.4000 at the close of business a week ago.

"The market continues to face dollar scarcity, further putting more pressure on the local unit which is expected to continue trading bearish in the near term," Access Bank ACCESS.LG said in a note.
Reporting by George Obulutsa, Elias Biryabarema, Nuzulack Dausen, Chris Mfula and Chijioke Ohuocha; Compiled by Maggie Fick; Editing by Emelia Sithole-Matarise and Alison Williams

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.