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WEEKAHEAD-AFRICA-FX -Kenyan shilling seen steady, Nigeria's naira could weaken
December 29, 2016 / 12:33 PM / 9 months ago

WEEKAHEAD-AFRICA-FX -Kenyan shilling seen steady, Nigeria's naira could weaken

NAIROBI, Dec 29 (Reuters) - Kenya’s shilling and Zambia’s kwacha are seen holding steady against the dollar in the next week to Thursday, while Nigeria’s naira will likely weaken, traders said.

KENYA

Kenya’s shilling is seen holding steady in the week to Thursday due to slow activity before weakening due to a resurgence in dollar demand.

At 0800 GMT, commercial banks quoted the shilling at 102.30/50 to the dollar, compared with last Thursday’s close of 102.25/45.

“We might not see too much play at the outset, because it is the beginning of the year. But (in) my view, the shilling ... is going to be under pressure. I do not see anything meaningful that will cause the shilling to strengthen tremendously,” a trader at one commercial bank said.

NIGERIA

Nigeria’s naira is set to witness another round of decline against the dollar in the days ahead as an increase in dollar flows from Nigerians living abroad coming home for holidays fell short of expectations, traders said.

The local currency was quoted at 490 to the dollar on Thursday from 495 against the dollar last week on the parallel market.

In the official interbank window, the naira was quoted at 310.25 to the dollar on Thursday, but it was expected to close at around 305.5, the same level it has traded at since August.

“We see the naira depreciating against the dollar by the time more businesses resume operations next week after the festive season as dollar liquidity remains thin in the market,” one currency dealer said.

TANZANIA

The Tanzanian shilling is seen trading in a tight range in the days ahead, helped by a slowdown in demand for greenbacks due to the year-end festive season.

Commercial banks quoted the shilling at 2,173/2,183 to the dollar on Thursday compared with 2,178/2,182 a week ago.

“The shilling is expected to remain range-bound next week. There usually isn’t much activity at this time of the year,” said a dealer at a commercial bank in Dar es Salaam.

GHANA

Ghana’s cedi is seen flat in the coming days amid an expected slowdown in market activity as the West African nation inaugurates a new president on Jan. 7.

It was trading at 4.24 to the dollar at 1100 GMT on Thursday, up from 4.277 a week ago. The currency has been fairly steady in recent weeks and is likely to end 2016 down 11 percent compared with an 18 percent depreciation last year.

“We are expecting to see some dormancy as markets reorganize after the holidays while offshore investors gauge the posture of the new president after the inauguration,” a currency trader at one of Accra’s leading commercial banks said.

ZAMBIA

The kwacha is expected to remain range-bound next week due to relatively subdued trading conditions at the beginning of the new year.

At 1038 GMT, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.8300 per dollar, from a close of 9.8000 a week ago, according to Thomson Reuters data.

“The kwacha is likely to continue trading flat going into 2017, it seems to have found its place,” independent financial analyst Maambo Hamaundu said.

UGANDA

The Ugandan shilling is seen trading with a weakening tone, hurt by appetite for dollars from commercial banks.

At 0955 GMT, commercial banks quoted the shilling at 3,610/3,620, weaker than last Thursday’s close of 3,562/3,572.

A trader at a leading commercial bank said inflows from sources like charities and commodity exporters would remain tight with the tempo of activity in both sectors seen remaining slow until around mid January.

The trader said the shilling would oscillate between 3,610-3,625 against the dollar in the coming days. (Reporting by George Obulutsa, Elias Biryabarema, Chris Mfula, Fumbuka Ng‘wanakilala, Kwasi Kpodo, Oludare Mayowa; Compiled by Elias Biryabarema; Editing by Mark Potter)

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