NAIROBI, July 18 (Reuters) - Kenyan currency forecast to weaken, Tanzanian shilling to hold steady while Nigeria’s naira could ease.
The Kenyan shilling is forecast to weaken against the dollar in the coming week because of excess money market liquidity and purchases of dollars by oil importers meet their month-end obligations, traders said.
Commercial banks quoted the shilling at 103.00/20 per dollar, compared with 102.85/103.05 at last Thursday’s close.
“Going into next week we could see renewed demand as importers come in for end of month ... there is excess liquidity so that will put pressure on the shilling,” said a senior trader from one commercial bank.
The Tanzanian shilling is expected to hold steady next week because demand for dollars is in balance with supply.
Commercial banks on Thursday quoted the Shilling at 2,294/2,304 slightly up from 2,295/2,305, a Senior Forex trader from one of the commercial banks in Dar es Salaam told Reuters.
“We forecast more stability of the currency next week nearly to the same levels as of now or with slightly appreciation because we are approaching the end of the month where corporates will be buying shillings to meet their end of the month obligations. Also, we expect more inflows from tourism which will balance with the demand from manufacturing and energy sectors,” he said.
Nigeria’s naira could ease next week amidst rising dollar demand as foreign inflows dry up in the wake of declining bond yields and a central bank policy to boost local lending, traders said.
The naira traded as low as 361.75 naira this week on tight supply, from its 360 support level. The currency was quoted at 360 on exchange bureaus and at 306.95 on the official market, backed by central bank. Nigeria operates a multiple currency regime.
The central bank plans to sell open market bills on Thursday to attract foreign investors after intermittent auctions as the bank tries to shift policy to force lending to help an economy stuck in low gear.
Traders said pressure was building on the currency. One told Reuters that the bank had been trying to fill $10 million worth of customer orders this week but no supply.
“There is no money in the market, everybody is on bid,” one trader said. “We are dependent on foreign investors and they are not coming in.” (Reporting by John Ndiso, Nuzulack Dausen, and Chijioke Ohuocha; compiled by Omar Mohammed; editing by Larry King)