WEEKAHEAD-AFRICA-FX-Most African Currencies Seen Under Pressure
The Zambian, Kenyan and Ugandan currencies are expected to face pressure against the U.S. dollar next week while Tanzania’s is likely to firm and Nigeria’s flat.
NIGERIA
The naira is seen unchanged next week following disruptions to businesses triggered by protests against alleged police brutality, prompting several states to impose round-the-clock curfews to curb demonstrations, traders said.
The naira was weaker on the black market on Thursday at 463 per dollar from 462 a week ago. It was quoted on the official market at 381 per dollar.
Nigeria’s biggest city, Lagos, and several states were under curfews on Wednesday as unrest rooted in anti-police protests broke out again following a day of violence, including the shooting of civilians by security forces.
The naira traded at 386.13 on the over-the-counter spot market, widely quoted by investors and importers, on thin volumes. (Reporting by Chris Mfula, George Obulutsa, Elias Biryabarema, Nuzulack Dausen and Chijioke Ohuocha; compiled by Chris Mfula; editing by Larry King)
ZAMBIA
The kwacha is likely to remain under pressure against the dollar next week as negative sentiment arising from the nation’s high indebtedness limits hard currency inflows.
On Thursday, commercial banks quoted the currency of one of the world’s largest copper producers at 20.2000 per dollar from a close of 20.1100 a week ago.
“I don’t see any significant change as in hoping for kwacha appreciation,” independent financial analyst Maambo Hamaundu said.
Ratings agency S&P has slashed Zambia’s credit rating to “selective default” after the government missed an interest payment last week and announced it would suspend debt service to external commercial creditors.
KENYA
Kenya’s shilling is expected to weaken, hurt by increased importer dollar demand, mostly from the energy sector.
Commercial banks quoted the shilling at 108.65/85 to the dollar, compared with last Thursday’s close of 108.60/80.
“We will see the Kenya shilling remain under pressure as we go towards the end of the month. We are expecting demand from oil and energy sectors and general importers,” a trader at one commercial bank said.
UGANDA
The Ugandan shilling is expected to weaken, undercut by an expected seasonal surge in demand for hard currency from merchandise importers.
Commercial banks quoted the shilling at 3,730/3,740, compared with last Thursday’s close of 3,725/3,735.
“We have seen a modest upward trend in demand in last couple of days, I anticipate that will play out for next couple of weeks,” said a trader from one of the commercial banks, referring to appetite for hard currency.
He said much of the pressure was being pushed by importers who typically exert greater demand around October-November to pay for shipments for year-end holiday shoppers.
TANZANIA
Tanzania’s shilling is expected to gain next week because of inflows from the cashewnut exports.
Commercial banks quoted the Shilling at 2,313/23, slightly above last week’s levels of 2,315/25.
“We expect the shilling to slightly appreciate next week because we have started seeing inflows from cashewnuts. So far, we are not seeing pressure to the currency in upcoming weeks,” trader at a commercial bank in Dar es Salaam said.
– Reuters