KAMPALA, April 26 (Reuters) - The Ugandan currency is likely to come under pressure in the coming week while those of Kenya and Zambia are expected to remain range-bound.
The Ugandan shilling is seen weaker next week undercut by demand from commercial banks and importers looking to cover short positions amid ebbing confidence in the local currency.
Commercial banks quoted the shilling at 3,705/3,715, weaker than last Thursday’s close of 3,695/3,705.
David Bagambe, trader at Diamond Trust Bank said some commercial banks and importers will be rushing to cover short positions.
“After crossing the 3,700 psychological level, everyone is moving to hedge, so there will be some position covering,” he said, adding the local currency would oscillate in the 3,690-3,740 level.
The Kenyan shilling is seen trading in a tight range in the coming week supported by inflows from offshore investors with end month demand posing a depreciation risk, traders said.
Commercial banks quoted the shilling at 99.90/100.00, compared with 100.05/25 at last Thursday’s close.
“We’re seeing more inflows from international investors... High dollar liquidity in the market (is) reducing demand,” said a trader from a commercial bank.
The kwacha is expected to remain range-bound in the coming week due to rising dollar demand from importers even as supply from from companies settling month end dues increases.
At 1115 GMT on Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.7000 per dollar, down from 9.5700 where it closed a week ago.
“We could still see the kwacha continue on its losing path – even breaking into 9.700. The market, however, could swing in the other direction if supply improves,” the local unit of South Africa’s First National Bank (FNB) said in a note. (Reporting by Elias Biryabarema, John Ndiso and Chris Mfula; Compiled by Chris Mfula Editing by Keith Weir)