DAR ES SALAAM, July 6 – The Tanzanian shilling is expected to remain firm in the days ahead, buoyed by a slowdown in demand for U.S. dollars, while Kenya’s shilling is expected to weaken due to demand from oil and merchandise importers buying dollars.
Commercial banks quoted the Tanzanian shilling at 2,238/2,243 to the dollar on Thursday, little changed from 2,234/2,244 a week ago. “The demand for dollars is more or less matched by supply, so the shilling will probably trade at the same levels next week,” said a trader at CRDB Bank.
The Kenyan shilling may weaken this week due to demand from oil and merchandise importers buying dollars for the last monthly cycle ahead of Aug. 8 elections, traders said.
Commercial banks quoted the shilling at 103.75/95 per dollar, compared with 103.60/70 at last Thursday’s close.
“We are approaching the elections and most businesses will want to import their last stock,” said a trader from a commercial bank.
The Nigerian naira is seen steady on the foreign exchange markets in the coming days as the central bank continue to inject dollar into the market to improve liquidity while also tightening naira liquidity to curb pressure on the local currency.
The local currency was quoted at 368 to the dollar on the black market on Thursday, stronger than 370 per dollar last week, while it was quoted by commercial lenders at 306.20 to the dollar on the interbank market against 305.5 a dollar last week.
On the investor forex window, the naira was quoted at 365.41 per dollar.
“It appears that the central bank is comfortable with the prevailing rates in the markets and we do not envisage any change soon as the bank sustains its intervention and tighten naira liquidity,” Aminu Gwadabe, president of the Bureau de Change Association, said.
Ghana’s cedi is seen steady next week on stable interbank forex liquidity inflows, helped by regular central bank’s dollar sales, an analyst said.
The local unit was trading at 4.3900 per dollar by mid-morning on Thursday, almost unchanged from 4.3902 a week ago.
“The cedi has remained firm this week largely on improved liquidity flows and we don’t expect much departure from this narrative in the coming week,” a commercial bank trader said.
The Ugandan shilling is forecast to trade in range over the next one week as investors show little appetite for the greenback at levels above 3,600, which they consider to be on the higher side.
At 0957 GMT commercial banks quoted the shilling at 3,597/3,606, broadly stable from last Thursday’s close of 3,595/3,605.
“Whenever the dollar climbs above 3,600, appetite cools because some players think the unit (dollar) is over-priced at that level,” said a trader at a leading commercial bank.
The trader said the local currency would likely oscillate between 3,590-3,610 against the greenback in the coming days. (Reporting by Fumbuka Ng’wanakilala, John Ndiso, Oludare Mayowa, Kwasi Kpodo and Elias Biryabarema.; Compiled by Olwethu Boso; Editing by Hugh Lawson)