January 3, 2019 / 12:42 PM / 2 months ago

WEEKAHEAD-AFRICA-FX-Kenya, Tanzania, Uganda currencies seen weakening next week

NAIROBI, Jan 3 (Reuters) - The Kenyan, Tanzanian and Ugandan currencies are likely to weaken in the coming week, while Zambia’s currency is expected to remain firm.

KENYA

The Kenyan shilling is expected to be under pressure against the dollar due to demand from oil and merchant importers as business activity resumes after the holiday season, traders said.

Commercial banks quoted the shilling at 102.10/20 per dollar, compared with 101.45/65 when markets shut for holidays.

“There is increased activity from all sectors, more people in their offices asking for dollars..., good demand from merchant importers, and that will continue for the next week,” said a commercial bank trader.

TANZANIA

The Tanzanian shilling is likely to depreciate slightly against the U.S. dollar due to market demand for the greenback after the Christmas holiday.

A forex trader at one of the commercial banks said on Thursday the shilling was trading last week at 2,295/2,303 against the dollar.

“Everybody is looking for dollars. Due to this demand, we are anticipating the market will pick up next week to the levels of 2,305/2,315 against the dollar,” he said.

ZAMBIA

The kwacha is expected to remain firm against the dollar in the coming week as companies convert hard currency to the local unit to pay taxes.

At 1000 GMT on Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 11.9500 per dollar from a close of 11.9400 a week ago.

“It is likely to hold firm because companies have to pay personal taxes for their employees by Friday next week,” a senior commercial bank trader said, referring to the kwacha.

UGANDA

The Ugandan shilling is seen trading with a weakening tone in coming days on the back of demand from typical hard currency buyers in sectors like manufacturing, telecoms and energy.

At 0900 GMT, commercial banks quoted the shilling at 3,720/3,730, compared to last Thursday’s close of 3,710/3,720.

“We’re are seeing significant demand from customers start to come through,” said Benon Okwenje, a trader at Stanbic Bank. Okwenje added that the shilling would probably trade between 3,715-3,735 to the dollar over the next week.

Most bulk foreign exchange buyers in Uganda are typically fuel importers, manufacturers and telecommunications firms. (Reporting by John Ndiso, Nuzulack Dausen, Chris Mfula and Elias Biryabarema Compiled by Maggie Fick Editing by Mark Heinrich)

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