Kenya's currency is expected to buck the trend as other currencies weaken next week, with Nigeria's, Zambia's and Uganda's currencies seen weaker against the dollar, while Ghana's cedi and Tanzania's shilling are set to hold steady.
KENYA Kenya's shilling is seen in a firm position in the coming week, helped by positive sentiment after the announcement that Kenya's government is working with the central bank to revive the interbank foreign exchange market.
At 1055 GMT commercial banks quoted the shilling at 131.30/50, compared to last Thursday's close of 130.00/20.
A trader from one commercial bank said the shilling would benefit from "collaborative efforts by CBK (central bank of Kenya) and commercial banks to reactivate interbank trading, providing the much-needed liquidity on the domestic FX market." On Wednesday President William Ruto said the government was working with the central bank to revive the interbank foreign exchange market, which has been dormant in recent years, because of what traders said was aggressive policing by the central bank.
NIGERIA Nigeria's naira is seen weaker on the parallel market as pressure builds on the currency after the central bank allowed formerly-withdrawn banknotes to circulate again to ease cash shortages that had disrupted payments, traders said. The naira traded 741 against the dollar on the parallel market on Thursday, from 731 naira last week. It traded within a range of 460 to 462 on the official market . "The naira depreciated against the dollar... as FX (foreign exchange) demand increased and the central bank allowed old 500- and 1000-naira notes to recirculate," foreign exchange trading firm AZA Finance said in a note. "We expect the naira to continue weakening against the dollar in the near term as FX demand gathers steam."
ZAMBIA The kwacha is likely to weaken further against the dollar next week as the market's short supply of hard currency continues to put pressure on the local unit. On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 21.1500 per dollar, down from 20.6700 at the close of business a week ago. "The market has continued to witness high demand for the greenback but supply remains minimal," one commercial bank trader said.
Finance Minister Situmbeko Musokotwane said last week that delays in the country's debt restructuring process were putting pressure on the local currency as foreign investors were scared investments in Zambian bonds would be subject to restructuring. World Bank President David Malpass said on Tuesday he was concerned about the debt restructuring stalemate in Zambia.
UGANDA The Ugandan shilling is seen weakening in the coming days, undercut by continuing elevated demand from foreign firms looking to pay dividends to their shareholders, traders said.
At 0825 GMT commercial banks quoted the shilling at 3,765/3,775, compared to last Thursday's close of 3,740/3,750.
"It's a dividend payments season, so we're seeing a bit of strong demand from those firms with foreign shareholders," said a trader at one bank.
"This demand will determine the trajectory in the short term."
GHANA Ghana's cedi is expected to remain stable next week due to a slowdown in corporate demand for the dollar and improved liquidity, analysts said.
Refinitiv Eikon data showed the cedi trading at 12.2000 to the dollar on Thursday, unchanged from a week ago. That trend is expected to persist in coming days on the back of improved FX liquidity, South African lender Absa Group said in a note. "We expect the cedi to hold on to its gains in the coming sessions," said Chris Nettey, a trader with Stanbic Bank.
TANZANIA Tanzania's shilling is expected to remain stable next week with inflows from foreign direct investments equalling dollar demand from manufacturing and energy sectors.
Commercial banks quoted the shilling at 2,333/2,343 on Thursday, compared to 2,335/2,345 recorded at the close of last Thursday's session. "Investor confidence should help support the shilling from any dramatic declines as markets react to the Marburg outbreak in Tanzania," said Kristine Van Helsdingen, a trader at AZA Finance, a Nairobi-based FX trading firm. (Reporting by Christian Akorlie, Chris Mfula, Nuzulack Dausen, Elias Biryabarema and Chijioke Ohuocha; compiled by Hereward Holland; Editing by James Macharia Chege)
