November 29, 2018 / 12:03 PM / 16 days ago

UPDATE 1-AFRICA-FX-Zambia's currency seen range-bound, Uganda's to firm

(Adds Nigeria’s naira)

NAIROBI, Nov 29 (Reuters) - Zambia’s currency is likely to remain range-bound in the coming week while Uganda’s is expected to firm and Kenya’s could come under pressure from importers.

ZAMBIA

The kwacha is expected to remain range-bound because of reduced demand for dollars towards the end of the year.

At 1020 GMT on Thursday commercial banks quoted the currency of Africa’s second-largest copper producer at 12.0250 per dollar from a close of 11.8500 a week ago.

“It should remain around current levels because most importers have already stocked up, limiting demand for dollars,” said independent financial analyst Maambo Hamaundu.

UGANDA

The Ugandan shilling is likely to firm over the next week on the back of receding appetite for hard currency from merchandise importers and inflows from non-governmental organisations (NGOs).

“By now most importers have already met all their foreign-exchange needs for holiday shoppers, so in December we typically see flat demand,” said a trader at a leading commercial bank.

However, charities, which receive most of their donations in hard currency, are expected to perform significant conversions to clear outstanding obligations for the year.

The shilling, the trader said, is likely to trade between 3,710-3,730 against the dollar next week.

At 1233 GMT commercial, banks quoted the shilling at 3,725/3,735, against last Thursday’s close of 3,715/3,725

KENYA

The Kenyan shilling is expected to come under pressure next week from oil and merchandise importers buying dollars to meet month-end obligations ahead of the holiday season, traders said.

Commercial banks quoted the shilling at 102.45/65 per dollar, unchanged from last Thursday’s close.

“Mostly it’s importers buying to meet future dollar needs during the holiday season,” said a senior trader from a commercial bank.

Nigeria

Nigeria’s naira is likely to ease next week as oil prices drop and foreign inflows stagnate on the potential for a fractious campaign ahead of next year’s presidential election, traders said.

The naira traded between 364 and 364.50 over the counter on Thursday, from 363 a week earlier, traders said. On currency bureaus it was quoted at 366 per dollar and 306.80 on the official market, supported by the central bank.

“There’s no new investment coming in and oil prices have been dropping, so investors are watching while some are exiting,” one trader said. “I don’t see the situation improving.”

Traders said forex shortages could worsen as funds close their books for the year unless the central bank boosts dollar sales.

Reporting by Chris Mfula, Elias Biryabarema, Chijioke Ohuocha and John Ndiso; Compiled by Omar Mohammed; Editing by David Goodman

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