DAR ES SALAAM, Jan 16 (Reuters) – Tanzania’s shilling is forecast to weaken slightly against the U.S. dollar in the next week to Thursday, while Uganda’s shilling will hold steady, traders said.
The Kenyan shilling is expected to strengthen due to increased inflows from the agricultural sector and diaspora remittances amid thin importer dollar demand.
Commercial banks quoted the shilling at 100.95/101.15 per dollar, compared with 101.40/60 at last Thursday’s close.
“We’re seeing increased inflows from the agricultural sector, which has caused the market to appreciate … we expect the trend to continue, demand is a bit subdued at the moment,” said a trader at a commercial bank.
The Ugandan shilling is expected to be stable on the back of inflows from exports of agricultural commodities.
At 1021 GMT, commercial banks quoted the shilling at 3,675/3,685 per dollar, unchanged from last Thursday’s close.
A trader at a leading commercial bank said the market expects to receive higher inflows of dollars from exports of coffee and other agricultural commodities as receding rains have opened up rural transportation corridors.
“The sunny weather that has set in means commodities can easily be transported, so that may translate into higher export volumes and higher (FX) flows,” the trader said.
Tanzania’s shilling is expected to weaken slightly due to lower dollar inflows.
Commercial banks quoted the Shilling at 2,306/2,316 per dollar on Thursday, compared with 2,300/2,310 at last Thursday’s close.
“We expect the shilling to weaken slightly next week for a while due to shortage of dollars but it will come back to its normal levels because businesses are starting the year,” said a trader at a commercial bank in Dar es Salaam.
Nigeria’s naira is forecast to be steady after firming this week, lifted by inflows from foreign investors seeking to buy central bank’s high-yielding treasury bills, traders said.
The naira was quoted at around 361 to the dollar on Thursday, from 363 it fetched on the over-the-counter market last week. It was quoted as low as 364 at the start of the year, traders said.
The currency was quoted at 306.95 on the official market, supported by the central bank. Nigeria operates a multiple currency regime.
“The market is fairly liquid. Foreign investors are coming in to buy OMO (Open Market Operation) bills,” a trader said. “The (naira) market is expecting 435 billion naira of maturity today.”
The one-year bill is trading at around 13.25%.
The kwacha is likely to remain range-bound against the dollar in the coming week due to matching demand and supply for the greenback. On Thursday, commercial banks quoted Africa’s second-largest copper producer’s currency at 14.5000 from a close of 13.9000 a week ago. “We do not expect an easing of demand, but prospects of improved supply will likely ensure moves are restricted,” the local branch of South Africa’s First National Bank said in a note. (Reporting by Nuzulack Dausen, Elias Biryabarema, John Ndiso, Chijioke Ohuocha and Chris Mfula;compiled by George Obulutsa; Editing by Aditya Soni)