NAIROBI, Sept 21 – The Kenyan shilling is expected to be little changed next week on concern the central bank might intervene in the market. The Zambian kwacha may strengthen against the dollar.
The Kenyan shilling is expected to remain stable against the dollar in the coming week with central bank intervention likely to smooth out any volatility, traders said.
At 1059 GMT, commercial banks quoted the shilling at 103.27/47 per dollar compared with 102.80/103.00 at last Thursday’s close.
“We have some players bidding for dollars, especially from manufacturing sector and oil industry; on the other hand the central bank is ready to protect the shilling,” said a trader from a commercial bank.
The Nigerian naira is expected to trade little changed next week as investors await the central bank’s decision on interest rate on Tuesday, which could affect portfolio inflows and currency market liquidity.
The naira traded at around 360 to the dollar on Thursday for investors, who have been offering to sell the U.S. currency at 365 naira, close to the black market rate of 367.
On the official market, the naira is quoted at 306, a level at which the central bank has been selling $500,000 daily to lenders to clear matured letters of credit, traders say.
A Reuters poll analysts predicted rates would stay on hold at 14 percent.
The Zambian kwacha is likely to strengthen next week with the supply of dollars improving as as companies prepare for tax payments and other local currency month end obligations.
At 1037 GMT, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.4200 per dollar from 9.5100 a week ago.
“We are likely to see some good performance ahead, supported largely by conversions for taxes,” the local branch of South Africa’s First National Bank (FNB) said in a note.
The Ugandan shilling is expected to strengthen over the next few days amid weak demand and inflows from offshore investors.
At 1216 GMT, commercial banks quoted the shilling at 3,595/3,605, unchanged from last Thursday’s close.
The central bank is due to sell Treasury bonds of three- and 10-year tenors on Oct. 4, and a trader from a leading commercial bank said healthy participation by offshore investor is likely, boosting dollar supplies.
The Tanzanian shilling is expected to remain stable over the next week, helped by end-of-month hard-currency inflows from the mining sector and other foreign investors.
Commercial banks quoted the shilling at 2,240/2,250 to the dollar on Thursday, unchanged from a week ago.
“The shilling is being supported by dollar sales from mining companies and other corporates as they look for the local currency to pay month-end taxes and salaries. We expect the shilling to trade in the same levels next week,” said a trader at CRDB Bank. (Reporting by Elias Biryabarema, Chijioke Ohuocha, John Ndiso and Chris Mfula and Fumbuka Ng‘wanakilala)(Reuters)