LUSAKA, July 2 (Reuters) - The Kenyan shilling is expected
to trade on the back foot next week while that of Tanzania is
seen strengthening and the Nigerian, Ugandan and Zambian
currencies holding steady.
KENYA
The Kenyan shilling KES= could come under pressure in the
coming week due to U.S. dollar demand from the energy and
manufacturing sector outweighing inflows from remittances and
horticulture exports, traders said.
Commercial banks quoted the shilling at 106.45/65 per
dollar, compared with 106.35/55 at last Thursday's close.
"We are seeing end month demand spill over into the new
month. There has been good demand from the oil sector and
manufacturers who haven't covered their (dollar) requirements,"
said a senior trader from one commercial bank.
TANZANIA
Tanzania's shilling TZS= is expected to firm against the
greenback as businesses activities pick up after slowing due to
restrictions to curb the spread of the coronavirus.
Commercial banks quoted the local currency against the U.S.
dollar at 2,310/20 on Thursday, the same rates recorded the week
earlier.
"We expect some inflows in the market because business
operations are resuming now after slowing down due to
coronavirus. Also, the World Bank announcement that Tanzania has
moved to the lower middle income country status is highly likely
to strengthen our shilling in the coming weeks," one commercial
bank trader said.
NIGERIA
Nigeria's naira NGN= is likely to trade unchanged across
markets on expectations the central bank will boost intervention
to businesses and individuals to ease dollar shortages that have
plagued the country for months.
The naira opened at 386.86 on the over-the-counter spot
market, traded by investors on Thursday, as against 361 on the
official market, backed by the central bank.
The central bank, the main source of dollars in Nigeria, has
been selling hard currency to firms and individuals. Traders
expect the bank to step up sales to ease pressure on the naira,
especially on the black market, where it is trading around 460.
"The central bank is intervening and that's where the
activity is," one trader said, describing the lack of liquidity
on the market. "It's not everyone that gets the dollar so demand
keeps going to the black market."
UGANDA
The Ugandan shilling UGX= is seen trading little changed
in the coming weeks as appetite for hard currency remains mostly
subdued among importers of merchandise.
Commercial banks quoted the shilling at 3,720/3,730,
compared to last Thursday's close of 3,735/3,745.
Consumer spending is very thin, said an independent foreign
exchange trader in the capital Kampala, because of widespread
joblessness and depressed incomes caused by the effects of the
coronavirus.
"As a result importer activity has declined substantially
and that has kept hard currency appetite thin," he said.
The shilling, he said, would likely swing in a 3,700-3,720
range.
ZAMBIA
The kwacha ZMW= is likely to remain range-bound against
the dollar next week supported by reduced demand for hard
currency among importers.
On Thursday, commercial banks quoted the currency of
Africa's second largest copper producer at 17.9500 per dollar
from 18.0340 at close of trading a week ago.
"In the absence of other key fundamentals, subdued demand on
the back of reduced import activities will remain a critical
driver for direction," Zambia National Commercial Bank (ZANACO)
said in a note.