African Currencies Week Ahead: Kenyan, Ugandan And Zambian Units Seen Under Pressure

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NIGERIA – Nigeria’s currency is seen closing range-bound within 408 naira to 412 naira per dollar next week, despite recent weakness on the official market as the country attempts to unify its multiple spot exchange rates, traders said.

The unit traded at 412 naira per dollar on Thursday on the official market after slipping to a record low of 425.90 naira the previous session.

The naira was quoted at 485 per dollar on the black market on Thursday, a level it touched two weeks ago.

NAIROBI: Kenyan, Ugandan and Zambian currencies are likely to trade on the back foot against the US dollar next week as Nigeria and Tanzania’s hold steady.

KENYA – The Kenyan shilling will be under pressure in the coming week, as companies are getting ready for their end of month obligations amid projected lower economic growth.

At 0824 GMT on Thursday, traders quoted the shilling at 108.00/108.20 compared with last week’s close of 107.00/107.20.

“As end of month demand kicks in, we anticipate the shilling will come under pressure,” said one trader at a commercial bank in Nairobi.

“This is just a reflection of risk sentiment after the International Monetary Fund revised Kenya’s growth prospects from 7.6% to 6.3% for 2021,” another trader said.

The IMF and Kenyan authorities reached a staff-level agreement on economic policies to conclude the first review of its 38-month extended fund facility and extended credit facility financed programme, the IMF said on Monday.

UGANDA – The Uganda shilling is seen trading on a weak footing against the dollar in coming days as traders start to rebuild oversold positions, traders said.

At 1001 GMT commercial banks quoted the shilling at 3,560/3,570, compared to last Friday’s close of 3,530/3,540.

“I think the local currency hit its resistance level around 3,520…I anticipate some players will be active on the demand side to beef up their positions,” said a trader at one commercial bank.

ZAMBIA – The kwacha is likely to continue depreciating against the dollar in the coming week, albeit at a slower pace as demand for hard currency continues to outweigh supply.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 22.4500 per dollar from 22.3850 at the close of business last Thursday.

Zambia’s central bank sold $259.7 million in the first quarter of this year to moderate exchange rate pressure, governor, Christopher Mvunga said in a statement on Wednesday.

TANZANIA – Tanzania’s shilling is expected to hold steady next week as supply and demand for dollars across sectors stays evenly matched.

Commercial banks quoted the Shilling at 2,314/2,324 on Thursday, unchanged from last week’s close.

– Reuters

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