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CORRECTED-UPDATE 1-AFRICA-FX-Zambian currency to eke out gains, Tanzania's shilling seen softer

Published 08/10/2020, 16:04
Updated 08/10/2020, 16:18
CORRECTED-UPDATE 1-AFRICA-FX-Zambian currency to eke out gains, Tanzania's shilling seen softer
USD/KES
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USD/TZS
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USD/UGX
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USD/ZMK
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(Corrects paragraph 6 to say naira 2.2% firmer than a week ago,
not than the previous day)
LUSAKA, Oct 8 (Reuters) - Zambia's currency and Nigeria's
unofficial naira rate are expected to trade slightly firmer
against the U.S. dollar next week, while Tanzania's currency is
seen softening and those in Kenya and Uganda hold steady.

ZAMBIA
The kwacha ZMW= will likely make small gains against the
dollar next week, supported by hard currency sales by companies
preparing to settle tax accounts.
On Thursday, commercial banks quoted the currency of
Africa's second largest copper producer at 20.1000 per dollar
compared to a close of 19.9800 per dollar a week ago.
"It should get some temporary relief because of VAT (Value
Added Tax) payments that companies will be making next week,"
one financial analyst said.

NIGERIA
Nigeria's naira NGNFX=BDCN could firm on the black market
next week as the central bank sells forex to investors and curbs
import demand to support the currency, traders said.
The naira was 2.2% firmer than a week ago at 457 naira per
dollar on the unofficial black market on Thursday.
Traders say the central bank has been selling forex on the
spot and forward markets to foreign investors stuck in Nigeria
to repatriate funds while curbing import demand after it cut
rates last month to spur local production.
The naira traded at 386.21 on the over-the-counter spot
market NAFEX=FMDQ , widely quoted by investors and importers,
on volumes in excess of $58.52 million on Wednesday.
The naira was quoted at 381 per dollar on the official
market, which is supported by the central bank.

TANZANIA
Tanzania's shilling TZS= is expected to face pressure next
week from uncertainty ahead of national elections on Oct. 28.
Commercial banks quoted the shilling at an average of
2,313/2,327 on Thursday, around the same levels as last week.
"We foresee weakening pressure returning as political risk
ahead of elections on Oct. 28 drives speculators to bet against
the currency," said Terry Karanja, a treasury associate at
Nairobi-based FX trading firm AZA, in a note.

KENYA
The Kenyan shilling KES= is expected to trade in a narrow
range next week, with commercial banks watching to see if the
central bank will sell dollars to soak up demand pressure.
Commercial banks quoted the shilling at 108.50/70, compared
to last Thursday's close of 108.40/60.
"I think the key determinant is how much the central bank
sells to support the unit," said a trader at one of the
commercial banks in the capital Nairobi.
"If they were, for example, to stay out, then you may be
begin to see a bit of panic coming in and the currency weakening
a bit."
UGANDA
The Ugandan shilling UGX= is seen trading flat, as some
firms reserve local currency holdings to meet mid-month tax
payments.
At 0930 GMT commercial banks quoted the shilling at
3,700/3,710, compared to last Thursday's close of 3,710/3,720.
"Demand will remain broadly subdued in the coming days ahead
of corporates clearing their tax obligations mid-month," said a
trader at a leading commercial bank.

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