Ugandan, Tanzanian currencies seen weakening, Kenyan shilling steady
KAMPALA – The Ugandan and Tanzanian currencies are expected to come under pressure in the coming week while those of Kenya and Zambia are seen remaining stable.
The Ugandan shilling is seen trading with a weakening bias on the back of expected demand for U.S. dollars from importers in energy firms.
At 0954 GMT on Thursday commercial banks quoted the shilling at 3,720/3,730, unchanged from last Thursday.
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A trader from a leading commercial bank said players were anticipating a surge in appetite for dollars from fuel importers keen to replenish stocks depleted by peak demand during December holidays.
The Tanzanian shilling is expected to depreciate in the coming week due to the high demand for U.S. dollars currently prevailing in the market.
At 1135 GMT on Thursday, commercial banks quoted the shilling at 2,323 per U.S. dollar, down from a close of 2,295 a week ago.
“There is a lot of demand for dollars now in the market that has not been covered,” one commercial bank trader said.
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The Kenyan shilling is expected to hold steady in the coming week due to U.S. dollar inflows from offshore investors buying government debt and thin importer demand amid high liquidity in the local money market, traders said.
At 0926 GMT, commercial banks quoted the shilling at 101.70.90 per U.S. dollar, compared with 102.10/30 at last Thursday’s close.
“This month we have a new issue for a maximum of forty billion. I’d attribute the current move to weak dollar demand,” a senior commercial bank trader said, referring to a new issue of treasury bonds.
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The kwacha is likely to remain range-bound in the coming week with movements mainly being determined by demand and supply of U.S. dollars.
At 1200 GMT on Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 11.9000 per U.S. dollar from a close of 11.9500 a week ago.
“In the absence of increased supply, the currency pair will likely continue trading at current levels,” Cavmont Bank, a local commercial bank said in a note.