Ugan­dan shilling ex­pected to re­main firm, kwacha weak

The East African - - MARKETS - A JOINT RE­PORT Reuters

ZAM­BIA’S KWACHA is ex­pected to re­main un­der pres­sure next week on in­creased dol­lar de­mand while the Ugan­dan shilling should firm on the back of in­flows and re­duced lo­cal cur­rency liq­uid­ity. Com­mer­cial banks quoted the cur­rency of Africa’s No.2 cop­per pro­ducer at 9.6500 per dol­lar from 9.4500 a week ago.

“Cur­rent trends seem to in­di­cate that the lo­cal unit is likely to have a bi­ased move­ment to­wards the down­side should the cur­rent mis­match in de­mand and sup­ply re­main un­changed,” lo­cal com­mer­cial bank Cav­mont said in a note.

Nige­rian naira

The naira is ex­pected to trade around 360 to he green­back to in­vestors next week af­ter the cen­tral bank kept rates on hold to tighten liq­uid­ity, traders say. The naira has been trad­ing around 360 this week, close to the black mar­ket rate of 365, with an av­er­age of $100 mil­lion in­flows daily into the cur­rency mar­ket.

“There seems to be im­proved con­fi­dence by in­ter­na­tion­als at the cur­rent level. They have come back into the bond mar­ket,” one trader said.

Nige­ria dou­bled the amount it raised at a bond auc­tion on Wed­nes­day as lo­cal funds and for­eign in­vestors piled into longer-term debt to lock in higher re­turns. On the of­fi­cial mar­ket, the naira is quoted at 305.75, with the cen­tral bank sell­ing $500,000 daily to lenders.

Uganda shilling

The cur­rency is seen firm­ing in the com­ing days on the back of weak de­mand, in­flows from NGOS and a cen­tral bank mop-up of ex­cess lo­cal cur­rency liq­uid­ity. As at 1258 GMT com­mer­cial banks quoted the shilling at 3,600/3,610, un­changed from last week’s close. On Thurs­day the cen­tral bank re­moved a to­tal of 962 bil­lion shillings ($267.22 mil­lion) worth of ex­cess lo­cal cur­rency liq­uid­ity via a re­pur­chase agree­ment and two de­posit auc­tions.

Kenya shilling

The shilling is seen eas­ing against the dol­lar in the com­ing week due to de­mand from man­u­fac­tur­ers and oil im­porters to meet end month obli­ga­tions with cen­tral bank in­ter­ven­tion likely to stem any volatil­ity, traders said. At 1048 GMT, banks quoted the shilling at 103.20/ 40 per dol­lar, same as last Thurs­day’s close.

“I see the shilling weak­en­ing at a mea­sured pace punc­tu­ated by cen­tral bank in­ter­ven­tion,” said a trader from a com­mer­cial bank.

Tan­za­nia shilling

The shilling is seen hold­ing steady against the dol­lar in the days ahead. Com­mer­cial banks quoted the shilling at 2,240/2,250 to the dol­lar on Thurs­day, un­moved from a week ago.

“We ex­pect the shilling to be range-bound next week, but it could weaken to 2,245/ 2,255 lev­els in the event of a spike in de­mand for dol­lars,” said a trader at Com­mer­cial Bank Africa Tan­za­nia.

Pic­ture: File

A veg­etable ven­dor counts his tak­ings in Kam­pala.

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