LAGOS, Sept 3 (Reuters) - Nigeria's naira is expected to
strengthen while the Kenyan shilling is seen treading water as
foreign exchange traders eye whether the central bank will
intervene in the market again to lend support to the local
currency.
NIGERIA
Nigeria's naira NGNFX=BDCN is seen stronger on the black
market, after it rallied this week on the unofficial market as
the central bank sold dollars to foreign investors to clear
backlog demand, traders said.
The naira was quoted at 435 per dollar on the unofficial
market on Thursday, after it gained almost 10% on
Tuesday. It traded at 386.48 on the over-the-counter
spot market NAFEX=FMDQ .
The central bank has gradually restarted dollar sales after
it halted supplies following a coronavirus-induced lockdown to
slow the spread of the virus, which also reduced its activities.
The bank sold around $50 million to foreign investors on the
spot and forward markets this week in a test trade to gauge the
level of demand and said it will resume sales to retail currency
operators next week.
KENYA
The Kenyan shilling KES= is expected to be influenced by the
central bank's decision on whether to intervene in the market or
not, traders said.
The currency of East Africa's biggest economy, which was
trading at 108.20/40 per dollar on Thursday, dropped to its
lowest level in July, hit by demand for dollars and a reduction
in supply caused by the coronavirus-induced tourism slump.
Through sales of dollars to the banks, the central bank has
managed to maintain it at around its recent levels but traders
said it could weaken if the regulator decides not to intervene
again.
"The key determinant is how the central bank will react,"
said a currency trader with a commercial bank.
TANZANIA
The Tanzania shilling =TZS= is expected to hold steady next
week as the hard currency inflows from the recovering tourism
industry and agricultural exports lend support.
On Thursday commercial banks quoted the shilling at an
average of 2,313/2,326, nearly the same level recorded last week
of 2,315/2,325.
"We foresee a stable outlook," said Terry Karanja, a
treasury associate at AZA, a Nairobi-based FX trading firm,
adding he expected hard currency inflows from tourism and
exports of commodities like cotton and coffee.
UGANDA
The Uganda shilling UGX= is seen trading with a weakening tone
in the coming days ahead of the expected re-opening of the
country's borders, with resumption of international travel
activity seen pushing up demand for hard currency.
At 1003GMT commercial banks quoted the shilling at
3,680/3,690, compared to last Thursday's close of 3,675/3,685.
Although no date has been given yet the government of
President Yoweri Museveni has said they are preparing to re-open
the country's international borders.
"Resumption of international travel will definitely spur a
rise in demand...I think we'll see some (shilling) weakening but
on a moderate scale," said a trader at one commercial bank in
the capital Kampala.
ZAMBIA
The kwacha ZMW= is likely to continue trading on the back foot
against the U.S. dollar in the coming week due to increasing
demand for hard currency.
On Thursday, commercial banks quoted the currency of
Africa's second largest copper producer at 19.5610 per dollar
from a close of 19.3360 a week ago.
"The local unit is expected to remain under pressure as it
continues to look for support to match the persistent demand for
the U.S. dollar," Zambia National Commercial Bank (ZANACO) said
in a note.