Sunday, August 9

WEEKAHEAD-AFRICA-FX-Zambia’s kwacha under pressure, East Africa currencies steady – Yahoo Finance

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JOHANNESBURG, July 30 (Reuters) – The Zambian kwacha is likely to come under pressure in the coming week as month-end rebalancing sees some selling by corporate investors. In East Africa, currencies are set to remain range-bound.

ZAMBIA

The kwacha could weaken as companies complete hard currency sales to make month-end payments.

On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 18.2140 from a close of 18.0810 a week ago.

“We expect the local unit to face some headwinds in its quest to remain range-bound as big month-end corporate conversions have already been priced in,” Zambia National Commercial Bank (ZANACO) said in a note.

KENYA

The Kenyan shilling is also expected to be under pressure from increased dollar demand from the energy sector as international travel resumes in the east African economy.

Commercial banks quoted the shilling at 107.60/80 per dollar, compared with 108.10/30 at last Thursday’s close.

A senior trader at one commercial bank said they expected to “see more demand for dollars from the oil sector,” as international flights resume on Aug. 1.

UGANDA

The Ugandan shilling is seen firming, helped by inflows of hard currency from exports of commodities such as coffee.

At 1040 GMT commercial banks quoted the shilling at 3,683/3,693, compared to last Thursday’s close of 3,680/3,690.

“We’re receiving a bit of inflow from exporters of commodities like coffee, as is usual at the end of the month,” said a trader at a commercial bank in the capital Kampala.

He said the local currency will likely trade in the 3,670-3,690 range, with a bias on the upper end.

TANZANIA

The Tanzanian shilling is expected to hold steady next week, drawing support from exports of agricultural commodities weighing against weak demand from energy and other sectors.

Commercial banks quoted the local currency at 2,315/2,324, from an average of 2,310/19 a week ago under pressure from companies and manufacturers settling month-end payments in dollars, Terry Karanja, a treasury associate from AZA, a Nairobi-based forex trading firm said.

“We expect the shilling to stabilise as agriculture export inflows support the currency this coming week,” she said.

She did not name specific commodities but Tanzania has traditionally exported coffee, tea, cashew nuts and tobacco. (Reporting by George Obulutsa, Chris Mfula, Elias Biryabarema; Compiled by Mfuneko Toyana; editing by Barbara Lewis)

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