KENYA Kenya's shilling is expected to weaken despite increased liquidity provided by the revival of the long-dormant interbank market. Commercial banks quoted the shilling at 133.45/65 on Thursday, compared with last Thursday's close of 132.35/55. Persistent unmatched foreign exchange demand from fuel importers and the manufacturing industry has caused the shilling to lose 7.6% of its value against the greenback this year, according to Refinitiv data. The return of interbank trade had smoothed out volatility in the shilling's exchange rate, the central bank said last week. However, according to traders, volumes are not yet sufficient to stabilise the currency. "As much as the interbank market is being reactivated, my view is that the shilling will continue to depreciate because of the fundamentals," said a trader at a commercial bank.
UGANDA The Ugandan shilling is forecast to strengthen as seasonal appetite for dollars from foreign-owned firms starts to wane.
Commercial banks quoted the shilling at 3,745/3,755, compared with last Thursday's close of 3,765/3,775.
"We have been in a dividends season, which I think is at the tail-end now. I would say we'll probably see a reflection of that on the (dollar) demand side in the near term," said one trader in the capital Kampala. He said the shilling was likely to firm back to 3,700 levels in the coming days.
ZAMBIA Zambia's kwacha is likely to hold steady due to central bank support and companies converting dollars into local currency to pay taxes. On Thursday commercial banks quoted the currency of Africa's second-largest copper producer at 19.9200 per dollar from 21.6200 at the close of business a week ago. "The Bank of Zambia has been offloading significant amounts of dollars onto the market and we also have pay-as-you-earn tax, which is due next week," one trader said.
NIGERIA Nigeria's naira could weaken in the coming week after the currency dropped to a record low this week on the official market, traders said. The naira opened at 463.75 per dollar on Thursday after it hit a record low of 465.50 naira on Monday, outside a range of 460 to 462 where it has been stuck on the official market since the end of last year. The unit was quoted at 745 naira against the dollar on the parallel market on Thursday.
"The (FX) rate is trending up. There is an adjustment in rates," one trader said.
GHANA Ghana's cedi is expected to make further gains this week amid continued low demand for dollars. Refinitiv Eikon data showed the cedi trading at 10.6500 to the dollar on Thursday, compared to 11.5000 at last Thursday's close. The currency's recent strength is a result of monetary policy tightening and a drop in forex demand as market actors await the completion of a deal with the International Monetary Fund for a support package, Absa said in a note.
"The cedi's strength against the dollar continued this week as (dollar) supply continues to outweigh demand," said Chris Nettey, a trader at Stanbic Bank. But he added that the currency's upward trend could slow in the coming weeks as the current exchange rate was likely to boost dollar purchases.
(Reporting by Hereward Holland, Elias Biryabarema, Chris Mfula, Christian Akorlie, Chijioke Ohuocha; Editing by Anait Miridzhanian and Alexander Winning)
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