December 8, 2016 / 1:20 PM / 8 months ago

WEAKAHEAD-AFRICA-FX-Nigeria's naira seen steady from diaspora dollar inflows

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LAGOS, Dec 8 (Reuters) - Nigeria's naira is likely to tread water next week on dollar inflows from Nigerians visiting home during the holidays against waning demand, while the Kenyan shilling could weaken as the flow of greenbacks dries up.

Nigeria

The naira is expected to hold steady around its present level against the greenback in the parallel and official interbank market as dollar flows from Nigerians living abroad who are expected to visit home during the December holidays.

The local currency fell 1.78 percent week-on-week on Thursday to 485 to the dollar on the parallel market from 480 a dollar last week, while it was quoted by commercial lenders at 315 a dollar on the official interbank market.

The naira has, however, consistently closed around 305.5 a dollar level since August via the official window.

"Demand for the dollar is seen dropping ahead of the Christmas as businesses gradually wind down, while dollar flows from Nigerians in Diaspora visiting home on holiday is expected to increase supply in the market," one dealer said.

Kenya

The Kenyan shilling could weaken due to a decrease in dollar sales from charities and horticultural export earnings as the year comes to an end, traders said.

At 1125 GMT, commercial banks quoted the shilling at 101.85/102.05 to the dollar, little changed from last Thursday's close of 101.80/102.00

"Activity on the supply counter remains muted this time of year," said a trader from a commercial bank.

Tanzania

The Tanzanian shilling could hold steady, supported by foreign exchange flows from the agriculture sector amid subdued demand for greenbacks.

Commercial banks quoted the shilling at 2,174/2,184 to the dollar on Thursday, stronger than 2,180/2,183 a week ago.

"The shilling will likely remain at current levels next week due to a slowdown in demand for dollars," said a dealer at a commercial bank.

"We are also seeing inflows from the agriculture sector, corporates and NGOs which are selling dollars to clear payments in local currency before the end of the year."

Zambia

The kwacha is expected to remain steady due to subdued market activity as the year comes to an end.

At 1235 GMT on Thursday, the currency of Africa's No. 2 copper producer was quoted at 9.8600 per dollar from a close of 9.9850 a week ago, according to Thomson Reuters data.

"We don't anticipate any significant departure from the current levels because there isn't much activity," one senior commercial bank trader said. (Reporting by Oludare Mayowa, John Ndiso, Fumbuka Ng'wanakilala, Chris Mfula; Compiled by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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