KAMPALA, Jan 2 (Reuters) – Kenya’s shilling is expected to strengthen in the coming week, while the Tanzanian and Ugandan currencies are seen stable and Zambia’s kwacha is likely to remain under pressure, currency traders told Reuters.
The Kenyan shilling is forecast to be supported by inflows from diaspora remittances and market players trimming their long dollar positions as business resumes after the holiday season, traders said.
Commercial banks quoted the shilling at 100.85/101.05 per dollar, unchanged from Friday’s close.
“Market players tend to close the year long on dollars, at the beginning of the year we tend to see a reversal, … offloading their long dollar positions,” said a trader from one commercial bank.
The Ugandan shilling is seen trading stable in the next few days amid thin demand as the pace of business slowly picks up after the Christmas and New Year holidays.
Commercial banks quoted the shilling at 3,660/3,690, unchanged from Tuesday’s close.
“Activity at most business will take a while to resume and accelerate to full speed, that will reflect in demand for dollars,” said a trader at a leading commercial bank.
He said the shilling would probably oscillate around the 3,660-3,675 level for the next week.
The Tanzanian shilling is expected to hold steady next week as most businesses and traders return gradually from holidays.
Commercial banks quoted the local currency at 2,293/2,303, the same levels recorded a week earlier.
“The shilling is expected to remain stable next week, in the same levels as has been the case for the last three weeks because most organisations and traders are still on holidays and the market is still quiet now,” said a trader at one commercial bank in Dar es Salaam.
He said market activity was expected to return to normal in the second week of January.
The Zambian kwacha is likely to remain under pressure against the U.S. dollar next week because of sustained demand for hard currency.
On Thursday, commercial banks quoted the currency at 14.1900 per dollar from a close of 13.7390 a week ago.
“The pressure of imports and aspects of debt servicing is still there,” independent financial analyst Maambo Hamaundu said.
Reporting by Elias Biryabarema in Kampala, John Ndiso in
Nairobi, Nuzulack Dausen in Dar es Salaam, Chris Mfula in
Lusaka; editing by Alexander Winning, Larry King