August 9, 2018 / 11:35 AM / 8 days ago

WEEKAHEAD-AFRICA-FX-Kenyan shilling to firm, Zambian kwacha seen easing

NAIROBI, Aug 9 (Reuters) - Kenya’s shilling is expected to gain ground against the dollar in the week to next Thursday, while Zambia’s kwacha is forecast to weaken, traders said.

KENYA

The Kenyan shilling is expected to remain firm against the dollar supported by tight liquidity in the money market and offshore investor inflows, traders said.

Commercial banks quoted the shilling at 100.35/55 per dollar, compared with 100.35/35 at last Thursday’s close.

“We saw some tightness in the money markets but the regulator injected Kenyan shillings, they said liquidity was skewed,” said a trader from a commercial bank.

UGANDA

The Ugandan shilling is seen strengthening in the coming days on the back of hard currency inflows from charities, commodity exporters and offshore investors.

Commercial banks quoted the shilling at 3,663/3,673, stronger than last Thursday’s close of 3,690/3,700.

Benon Okwenje said the currency was likely to oscillate between 3,655-85 against the dollar, helped by hard currency inflows “from a range of sources including NGOs (non-governmental organisations), commodities and portfolio flows.”

Uganda’s foreign exchange earnings from commodities mostly come from coffee.

NIGERIA

Nigeria’s naira is seen trading within its current range of 362 to 363 next week, supported by dollar inflows from exporters, traders said.

Last week, the naira was quoted as weak as 364 per dollar for investors after liquidity thinned out. One trader said dollar supply had improved but there was still ample demand, owing to Nigeria’s reliance on imports.

On the official market, supported by the central bank, the unit weakened slightly to 306.50.

ZAMBIA

The kwacha is likely to come under pressure due to renewed demand for hard currency from importers.

On Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.9200 per dollar, the level at which it closed a week ago.

“A continued increase in demand for the greenback in the midst of waning dollar supply may see the local unit depreciate further,” the local branch of South Africa’s First National Bank (FNB) said in a note. (Reporting by Chris Mfula, John Ndiso, Elias Biryabarema, Chijioke Ohuocha; compiled by George Obulutsa; Editing by Mark Potter)

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