AFRICA-FX-Kenyan shilling to weaken, Uganda's to be stable
Adds Nigerian naira
DAR ES SALAAM, Feb 13 (Reuters) - Kenya's shilling is expected to weaken against the dollar in the next week, while Uganda's will be stable, traders said.
The Kenyan shilling KES= is seen under pressure in the coming week due to increased dollar demand from merchandise importers and some multinational companies, traders said.
Commercial banks quoted the shilling at 100.40/60 per dollar, compared with 100.35/55 at last Thursday's close.
"As we go into dividend payment period we might see the strengthening slow down," said a senior trader from one commercial bank.
The Ugandan shilling UGX= was seen holding steady, with the central bank's decision to keep interest rates unchanged expected to fuel favourable market sentiment.
Commercial banks quoted the shilling at 3,664/3,674, compared with last Thursday's close of 3,670/3,680.
"Most market players expected a (rate) hold, which turned out the case so overall I don't expect any major movement on either side of the market," said a trader from a leading commercial bank.
On Thursday Bank of Uganda held its benchmark lending rate at 9%.
The Tanzanian shilling TZS= is expected to gain slightly due to reduced dollar demand from importers and an increase in inflows from non-governmental organisations.
Commercial banks quoted the shilling at 2,306/2,316 per dollar, the same level as last Thursday's close.
"The shilling will gain slightly ... because there are many NGOs which are in pipeline selling dollars," a trader at one commercial bank said.
"There is reduced pressure ... due to the slow demand for dollars because importers who import from China are not trading as much because of coronavirus ... this will stabilise the shilling."
Nigeria's naira NGN= is seen stable next week after the central bank on Thursday offered longer-term contracts on the naira to lure more foreign inflows and buff up its dwindling dollar reserves, traders said.
The naira was quoted at around 364 per dollar on the over-the-counter market, a level it has been for more than a week.
Nigeria's currency market has been on bid with little supply as foreign investors stay on the sidelines owing to lower yields on the debt market, worsened by weak sentiment over fears that the coronavirus outbreak in China would hit demand, traders said.
The central bank has been helping to meet some dollar demand, keeping the naira stable on the official market at 306.95.
"We are not seeing flows from foreign investors. There's no liquidity in the market at the moment," one trader said.
"The new futures is to attract people to come through longer tenor."
(Reporting by John Ndiso, Elias Biryabarema, Nuzulack Dausen and Chijioke Ohuocha; compiled by George Obulutsa; Editing by Hugh Lawson)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.