WEEKAHEAD-AFRICA-FX-African currencies set for stable week

Published 03/10/2019, 14:20
Updated 03/10/2019, 14:30
© Reuters.  WEEKAHEAD-AFRICA-FX-African currencies set for stable week

LUSAKA, Oct 3 (Reuters) - Zambian, Nigerian, Kenyan, Ugandan

and Tanzanian currencies are all expected to be stable in the

coming week.

ZAMBIA

The Kwacha ZMW= will be supported by an improved supply of

hard currency as companies prepare to pay taxes.

On Thursday, commercial banks quoted the currency of

Africa's second-largest copper producer at 13.1400 per dollar

from a close of 13.1750 a week ago.

"There are taxes due next week on Thursday and this should

support the local currency," one senior commercial bank trader

said.

NIGERIA

Nigeria's naira NGN= is expected to be steady next week

hitting resistance against the U.S. dollar at current levels and

with dealers refusing to lower bids for the greenback, traders

said on Thursday.

The naira was quoted in a range of 362-362.50, after

touching a low of 362.65 the previous day. The naira was quoted

at 360 at exchange bureaus and at 307 on the official market.

Nigeria operates a multiple currency regime.

Traders said demand was lacklustre as most people preferred

to wait and bid for the U.S. currency at firmer rates than

weaken the naira.

KENYA

The Kenyan shilling KES= isn't expected to change much

against the U.S. dollar in the coming week with inflows from

diaspora remittances helping meet dollar demand from the energy

sector amid excess liquidity in local money markets, traders

said.

Commercial banks quoted the shilling at 103.80/104.00 per

dollar, compared with 103.75/95 at last Thursday's close.

"The liquidity aspect has been the dominant factor and

central bank has been mopping up aggressively...importer demand

is waning," said a trader from one commercial bank.

UGANDA

The Ugandan shilling UGX= is expected to be partly

supported by inflows of hard currency from commodity exports and

offshore investors buying Ugandan government debt.

At 1212 GMT on Thursday, commercial banks quoted the

shilling at 3,675/3,685, unchanged from last Friday's close.

"I think inflows from this week's (Treasury) bond auction

will compliment inflows from coffee and other agricultural

commodities and help keep the market square," said a trader at

one of the commercial banks in the capital Kampala.

He said the local currency would likely trade around 3,680

to the dollar in the coming days.

TANZANIA

The Tanzanian shilling TZS= will struggle to move

decisively given the balance between U.S. dollar supply and

demand in the market.

On Thursday commercial banks in the capital Dar Salaam

quoted the shilling at 2,293/2,303, the same level as a week

"We expect mining, services industry and transport to

contribute more to the inflows, while the demand will be driven

by oil importers and manufacturers," said a forex trader from

one of the commercial banks in Dar es Salaam.

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