February 1, 2018 / 1:04 PM / a year ago

WEEKAHEAD-AFRICA-FX-Zambian currency seen firm, Tanzania's bearish

LUSAKA, Feb 1 (Reuters) - Zambia’s kwacha is likely to gain next week after encouraging economic news. Tanzania’s shilling is expected to come under pressure.


The kwacha is expected to strengthen on higher copper prices, stable inflation and positive sentiment after ratings agency Moody’s upgraded its outlook to stable from negative.

At 0945 GMT, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.7427 per dollar from 9.7000 a week ago.

“We remain fairly bullish about the currency. This view is anchored around the premise of some positive developments,” the local branch of South Africa’s First National Bank (FNB) said.


The Tanzanian shilling is seen under pressure against the U.S. dollar in the coming days, underpinned by demand for dollars from the oil sector and other importers.

Commercial banks quoted the shilling at 2,249/2,254 to the dollar on Thursday, slightly weaker than 2,248/2,253 a week ago.

“We expect the shilling to be under continued pressure next week due to a slowdown in inflows of dollars and growing demand for the U.S. currency from importers,” said a trader at CRDB Bank.


The Kenyan shilling is seen stable in the coming week as sales of government debt and stock market activity offset routine demand from oil importers, traders said.

Commercial banks quoted the shilling at 101.80/102.00 per dollar, compared with 102.35/45 at last Thursday’s close.

“A lot of inflows had come in from international investors thanks to the infrastructure bond that has been re-opened, before there were massive rejected bids,” said a trader from a commercial bank.


The Ugandan shilling is forecast to trade in a stable range in the coming days as weak importer demand meets with inflows from exporters of commodities like coffee and cocoa.

At 0915 GMT commercial banks quoted the shilling at 3,620/3,630, stronger than last Thursday’s close of 3,633/3,643.

“Importer activity on the demand side has ebbed a bit, while on the other side commodities are bringing in some inflows,” said a trader at a leading commercial bank.


Ghana’s cedi is expected to remain steady as offshore investor interest is balanced by dollar demand from local firms to settle import bills. The cedi was trading at 4.49 to the dollar at 1033 GMT on Thursday, stronger than last week’s 4.54 close.

“The cedi is likely to lose part of its gains as importers and corporate buyers take advantage of the relatively low rate to mop dollars ahead of bills or settlements due in the next few weeks,” said Raphael Adubila, Treasury officer of the Accra-based Northstar Home Finance.


The naira is likely to remain stable against the dollar next week as demand weakens whenever the unit trades below 360 per dollar, traders said.

Traders said most forex users are not willing to source dollars weaker than 360 at the investors window and that offshore investors have been buying local debt in search of yields, boosting liquidity on the currency market.

On the official market, the naira was quoted at 305.70, supported by the central bank’s regular intervention. (Reporting by Chris Mfula, Fumbuka Ng’wanakilala, John Ndiso, Elias Biryabarema, Kwasi Kpodo and Chijioke Ohuocha; Compiled by Chris Mfula; Editing by Larry King)

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