Reuters
Published Feb 27, 2020 15:07
WEEKAHEAD-AFRICA-FX-Zambia, Uganda currencies seen softening, Kenya’s to firm
LUSAKA, Feb 27 (Reuters) - Zambia's and Uganda's currencies
are expected to fall next week, while Kenya's is expected to
rise, traders say.
ZAMBIA
The kwacha ZMW= is likely to come under pressure in the
coming week, weighed down by the country's debt service
obligations.
On Thursday, commercial banks quoted the currency of Africa's
second-largest copper producer down at 14.9 per dollar from a
close of 14.556 a week ago.
"The economic fundamentals, particularly the debt position,
suggest a weakening currency," independent financial analyst
Maambo Hamaundu said.
UGANDA
The Uganda shilling UGX= is seen trading with a weakening
bias on the back of elevated demand from foreign-owned firms
looking to pay last year's dividends.
At 1029 GMT, commercial banks quoted the shilling at
3,695/3,705, compared to last Thursday's close of 3,670/3,680.
“The dividends payment season should be getting underway next
month which will push demand up," a trader at a leading
commercial bank said, referring to demand for hard currency.
He said the shilling will likely weaken past the key
psychological level of 3,700 as dividend-driven demand picks up.
KENYA
The Kenyan shilling KES= could strengthen in the coming
week due to easing month-end dollar demand from merchant
importers amid inflows from horticulture exports, traders said.
At 1020 GMT, commercial banks quoted the shilling at
100.85/101.05 per dollar, compared with 101.00/20 at last
Thursday's close.
"The new month should be more stable... horticulture flows
could come in to support a slight strengthening of the
shilling," said a senior trader from one commercial bank.
TANZANIA
Tanzania's shilling TZS= is expected to hold steady next
week due to the slowing demand for dollars from importers whose
trade activities have been hurt by the coronavirus outbreak.
Commercial banks quoted the shilling at 2,304/2,309 on
Thursday, up from the 2,310/2,315 recorded a week earlier.
"The shilling will remain stable next week because it will be
the beginning of the month where activities always slow down
slightly and also coronavirus has slowed importation thereby
reducing the demand of dollars," a trader in one of the
commercial banks in Dar es Salaam said.
NIGERIA
Nigeria's naira NGN= is seen unchanged next week as
liquidity shortages in the currency market persist after lower
yields on the debt market keep foreign investors on the
sidelines, traders said.
The currency was quoted weaker at around of 364.75 naira to
365 naira per dollar on Thursday on the over-the-counter market,
the same level it traded last week.
The central bank has been helping to meet some dollar
demand, keeping the naira stable on the official market at
306.45.
Traders said importers preferred to wait to fill their order
for the U.S. dollar rather than weakening the naira since
foreign inflows have dried up amidst dwindling government
reserves and lower oil prices.
Written By: Reuters
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