KAMPALA, June 4 (Reuters) – Ugandan, Kenyan, Zambian and Tanzanian currencies are likely to hold steady in the coming week.
The Ugandan shilling is expected to be little moved versus the U.S. dollar as traders await clues on policy announcements that may be contained in the 2020/2021 budget due to be read next week.
At 0940 GMT commercial banks quoted the shilling at 3,765/3,775, compared to last Thursday’s close of 3,780/3,790.
“I think most players will want to stand back and wait to see what the budget will have and implications for the shilling before taking positions,” said an independent foreign exchange trader in the capital Kampala.
The finance minister, Matia Kasaija is due to read the budget for the fiscal year to June 2021 on June 11.
The Kenyan shilling is next week also expected to remain stable against the greenback, underpinned by inflows from horticulture exports and subdued dollar demand, traders said.
Commercial banks quoted the shilling at 106.00/20 per dollar, compared with 107.00/20 at last Thursday’s close.
“We’ve seen diaspora money coming in as restrictions were lifted in other parts of the world, flower exporters started selling to Europe….demand will remain subdued until the lockdown is lifted,” said a senior trader from one commercial bank, referring to local restrictions in place to curb the spread of COVID-19.
The kwacha is likely to remain range-bound against the U.S. dollar next week supported by reduced demand for hard currency.
On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 18.0640 per dollar from a close of 18.2230 a week ago.
“We expect the local unit to trade within its newly established range,” Zambia National Commercial Bank (ZANACO) said in a note.
Tanzania’s Shilling is expected to hold steady next week amid the ongoing impact of the coronavirus on import and export businesses.
Commercial banks quoted the Shilling at 2,310/2,320 on Thursday, nearly the same levels as last week’s close of 2,309/2,319.
“The coronavirus pandemic has slowed the export business reducing inflows of dollars in the market and we don’t expect much pressure from energy and manufacturing sectors which are large drivers of the demand side,” one commercial bank trader said. (Reporting by John Ndiso, Elias Biryabarema, Chris Mfula and Nuzulack Dausen; Compiled by Chris Mfula; Editing by Emelia Sithole-Matarise)