October 3, 2019 / 1:21 PM / 17 days ago

WEEKAHEAD-AFRICA-FX-African currencies set for stable week

LUSAKA, Oct 3 (Reuters) - Zambian, Nigerian, Kenyan, Ugandan and Tanzanian currencies are all expected to be stable in the coming week.

ZAMBIA

The Kwacha will be supported by an improved supply of hard currency as companies prepare to pay taxes.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 13.1400 per dollar from a close of 13.1750 a week ago.

“There are taxes due next week on Thursday and this should support the local currency,” one senior commercial bank trader said.

NIGERIA

Nigeria’s naira is expected to be steady next week hitting resistance against the U.S. dollar at current levels and with dealers refusing to lower bids for the greenback, traders said on Thursday.

The naira was quoted in a range of 362-362.50, after touching a low of 362.65 the previous day. The naira was quoted at 360 at exchange bureaus and at 307 on the official market. Nigeria operates a multiple currency regime.

Traders said demand was lacklustre as most people preferred to wait and bid for the U.S. currency at firmer rates than weaken the naira.

KENYA

The Kenyan shilling isn’t expected to change much against the U.S. dollar in the coming week with inflows from diaspora remittances helping meet dollar demand from the energy sector amid excess liquidity in local money markets, traders said.

Commercial banks quoted the shilling at 103.80/104.00 per dollar, compared with 103.75/95 at last Thursday’s close.

“The liquidity aspect has been the dominant factor and central bank has been mopping up aggressively...importer demand is waning,” said a trader from one commercial bank.

UGANDA

The Ugandan shilling is expected to be partly supported by inflows of hard currency from commodity exports and offshore investors buying Ugandan government debt.

At 1212 GMT on Thursday, commercial banks quoted the shilling at 3,675/3,685, unchanged from last Friday’s close.

“I think inflows from this week’s (Treasury) bond auction will compliment inflows from coffee and other agricultural commodities and help keep the market square,” said a trader at one of the commercial banks in the capital Kampala.

He said the local currency would likely trade around 3,680 to the dollar in the coming days.

TANZANIA

The Tanzanian shilling will struggle to move decisively given the balance between U.S. dollar supply and demand in the market.

On Thursday commercial banks in the capital Dar Salaam quoted the shilling at 2,293/2,303, the same level as a week ago.

“We expect mining, services industry and transport to contribute more to the inflows, while the demand will be driven by oil importers and manufacturers,” said a forex trader from one of the commercial banks in Dar es Salaam. (Reporting by Chris Mfula, Chijioke Ohuocha, John Ndiso, Elias Biryabarema and Nuzulack Dausen; Compiled by Chris Mfula; Editing by Kirsten Donovan)

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