NAIROBI, July 16 (Reuters) - Kenyan and Nigerian currencies
are likely to come under pressure against the U.S. dollar next
week as Uganda's shilling strengthens and Tanzania's and
Zambia's currencies trade sideways.
KENYA
The Kenyan shilling KES= is forecast to weaken due to
increased dollar demand from merchandise importers and the
energy sector as business activity resumes following the lifting
of COVID-19 related movement restrictions, traders said.
Commercial banks quoted the shilling at 107.25/45 per
dollar, compared with 106.75/95 at last Thursday's close.
"We might see more buying pressure from merchandisers, oil
importers. Free movement means a rise in demand for fuel ...the
inflows are not enough to compensate," one commercial bank
trader said.
NIGERIA
Nigeria's naira NGNFX=BDCN is seen weaker on the black
market as demand shifts to the unofficial market after the
central bank this week told lenders to stop processing new trade
documents for maize imports, traders said.
The naira is quoted on the unofficial market at 470, weaker
from 465 per dollar the previous session. The central bank last
week adjusted the naira by 5.5% to 380 naira on the official
market, close to the over-the-counter spot market, widely used
by investors and importers.
The bank has been under pressure from the World Bank and the
International Monetary Fund to carry out currency reforms to
qualify for budget-support loans, and from the Nigerian
government to get more naira for its crude oil receipts.
The central bank this month unified its multiple exchange
rates to ease forex shortages that have plagued the country for
months, traders said, adding that dollar supplies had yet to
improve.
UGANDA
The Ugandan shilling UGX= is expected to strengthen in the
days ahead as inflows from commodities such as coffee, tea,
cotton offset tepid dollar demand.
Commercial banks quoted the shilling at 3,685/3,895,
compared to last Thursday's close of 3,680/3,690.
"The market is receiving some flows from coffee and other
commodities but the demand side is broadly flat," a trader at
one commercial bank said.
The appetite for hard currency from manufacturers and
general merchandise importers has been sluggish as the
coronavirus lockdown weakened consumer demand.
TANZANIA
Tanzania's shilling TZS= is expected to hold steady next
week, with dollar inflows from the mining sector expected to
meet importer demand.
Commercial banks quoted the local currency at 2,310/2,320
per dollar on Thursday, the same as last Thursday's close.
"We expect the exports of minerals to contribute to inflows
as the economy reopens," Terry Karanja, a Treasury Associate at
Nairobi-based Forex trading firm, AZA, said.
ZAMBIA
The kwacha ZMW= is likely to remain range-bound against
the U.S. dollar as importer demand continues slowing down,
giving support to the local unit.
On Thursday, commercial banks quoted the currency of
Africa's second-largest copper producer at 18.2320 per dollar
from a close of 10.0840 a week ago.
"The Kwacha is expected to trade on the back foot against
the dollar in the interim, but within its newly established
range," Zambia National Commercial Bank (ZANACO) said in a note.