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African currencies: Kenyan shilling to weaken, naira to stablise

The Kenyan shilling is expected to face pressure but that may ease gradually, while the Zambian kwacha is also anticipated to weaken amid higher importer appetite for hard currency.

KENYA

Kenya’s shilling is expected face pressure in coming days but traders said they anticipated demand for dollars would ease as the Christmas and New Year season progressed.

Commercial banks quoted the shilling at 112.90/113.10 per dollar, compared with last Thursday’s close of 112.85/113.05.

NIGERIA

The Nigerian naira was seen flat next week on the unofficial market where it trades more freely, after Nigeria was taken off Britain’s travel “red list” could boost diaspora inflows, traders said.

The currency traded at N575 per dollar on the parallel market on Thursday, marginally down from N573 last week. On the official market , commercial banks quoted the currency in a range of 409-415 against the dollar.

Britain removed Nigeria and other African countries from its COVID-19 travel red list after it added them in the wake of the outbreak of the Omicron variant of the coronavirus.

READ ALSO: NIMASA seeks collaboration with Ministry of Agric to stop illegal fishing

“I don’t see a lot of appreciation in view of the removal,” one trader said. “There might be a bit of movement which could create a bit of FX impact.”

TANZANIA

The Tanzania shilling should see limited downward pressure next week amid ongoing demand for hard currency.

Commercial banks quoted the shilling at an average of 2,300/2,310 on Thursday, slightly weaker from an average of 2,295/2305, recorded a week earlier.

“With year-end dollar demand likely to continue, we expect to see moderate pressure persist on the shilling in the coming days,” said Terry Karanja, a treasury associate at Nairobi-based AZA, adding that the highest demand for dollars was coming from the manufacturing and energy sectors.

UGANDA

The Ugandan shilling is seen stable in the coming days with demand mostly flat and some economic activities scaling down as the festive season gets underway.

At 1145 GMT commercial banks quoted the shilling at 3,560/3,570, unchanged from last Thursday’s close.

“Demand is expected to generally go down because some of the businesses in sectors like manufacturing and imports will scale down,” said an independent foreign exchange trader in Kampala.

The currency was likely to trade around 3,560, he said.

ZAMBIA

The kwacha is expected to come under pressure against the dollar. On Thursday, commercial banks quoted the currency of the copper-producing nation at 16.2301 per dollar from a close of 16.0000 a week ago.

“We expect the Kwacha to … trade with a depreciation tone next week,” Zambia National Commercial Bank (ZANACO) said in a note.

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