Credit: REUTERS/Thomas MukoyaNAIROBI, March 10 (Reuters) - Kenya's and Uganda's shillings are expected to weaken against the dollar in the next week to Thursday, as will Zambia's kwacha, traders said.
KENYA
The Kenyan shilling KES= is forecast to weaken due to increased dollar demand from companies preparing to pay dividends to their foreign shareholders, and oil companies anticipating higher petroleum prices as more governments pile sanctions on Russia for its invasion of Ukraine.
Commercial banks quoted the shilling at 114.10/30 per dollar, compared with last Thursday's close of 113.85/05. Its present level Its level is a new record low, according to Refinitiv data.
"There's dividend payments that are exerting lots of pressure and then a lot of significant fear from the oil prices," said a trader at one commercial bank.
ZAMBIA
The kwacha ZMW= is likely to remain on the backfoot as demand for hard currency continues to outweigh supply.
On Thursday, commercial banks quoted the currency of Africa's second largest copper producer at 18.1000 per dollar from 17.9500 at the close of business a week ago.
"The market continues to witness scarcity of hard currency while demand remains high and met by little to no supply, causing further pressure on the local unit," Access Bank ACCESS.LG said in a note.
UGANDA
The Ugandan shilling UGX= is expected to lose some ground, undercut by dollar demand from fuel importers.
Commercial banks quoted the shilling at 3,610/3,620, compared with last Thursday's close of 3,560/3,570.
"The prevailing oil price dynamics in the international markets, I think, means we'll likely see a higher level of demand from energy importers ...that will be a key driver," a trader at one commercial bank said.
He said the shilling was likely to trade in the 3,600-3,640 range over the coming week.
TANZANIA
Tanzania's shilling TZS= also is likely to face downward pressure due to higher oil prices.
Commercial banks quoted the shilling at 2,311/2,321 on Thursday, the same levels recorded at last week’s close.
“The rise in global oil prices and strains on wheat supply will likely lead to an increase in food prices. Given the inflationary pressures, we expect to see more pressure on the shilling over the coming weeks,” said Terry Karanja, a treasury associate at AZA, a Nairobi-based FX trading firm.
(Reporting by Elias Biryabarema, Nuzulack Dausen and Chris Mfula; Compiled by George Obulutsa; Editing by Kim Coghill)
((george.obulutsa@thomsonreuters.com; Tel: +254 20 499 1234; Reuters Messaging: george.obulutsa.thomsonreuters.com@reuters.net))
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