The currencies of Uganda, Kenya and Zambia are seen trading sideways in the week to next Thursday as most investors closed positions ahead of the end of the year while Nigeria’s naira is seen weaker as a dollar shortage persists, traders said.
The Uganda shilling is set to trade weaker over the next few days as commercial banks exert demand to square positions as the year nears its close.
At 0811 GMT commercial banks quoted the shilling at 3,562/3,572, stronger than last Thursday’s close of 3,590/3,600.
“In the last days of the year you normally see banks moving to cover short positions, so I expect some demand in that sense,” said a trader at a leading commercial bank.
NIGERIA
Nigeria’s naira is seen depreciating further and could hit the 500 mark to the dollar on the black market by next week as greenback scarcity persists and the central bank cuts supply to forex operators.
The local currency was trading around 495 to the dollar on the black market on Thursday, compared to 485 per dollar last week due to dollar shortages, traders said.
The naira was quoted at 310.5 to the dollar on the official interbank window on Thursday by commercial lenders.
“There is an acute shortage of dollars in the market because of supply being slashed by half to bureau de change from international money transfer agents, pushing the naira down,” one trader said.
Bureau de change operators are now getting $8,000 each per week from Travelex against the usual $15,000 each per week.
KENYA
The Kenyan shilling will likely to hold its position over the next week amid continued vigilance from the central bank, traders said.
At 0900 GMT, commercial banks quoted the shilling at 102.35/45 to the dollar, slightly weaker than last Thursday’s close of 102.00/102.10.
“Liquidity is a big thing at the moment, we do expect some consolidation and we expect the central bank to hold a strong dollar value against the shilling,” said one trader at a commercial bank.
ZAMBIA
The kwacha is expected to hold firm with a dampening in demand for hard currency and large corporates converting hard cash to settle their month end obligations.
At 1005 GMT on Thursday, the currency of Africa’s No.2 copper producer was quoted at 10.8050 compared to a close of 9.8500 a week ago, according to Thomson Reuters data.
“We continue to see some conversions of hard currency by major corporates for kwacha obligations. The local unit is expected to remain firm against the greenback in the interim,” the Zambian unit of Atlas Mara, BankABC said in a note.
