Importers
in Kenya and Tanzania are expected to keep the local currencies under pressure
next week, while low demand for the dollar in Uganda should support the
country’s shilling.
KENYA
Kenya’s
shilling is likely to weaken due to rising month-end demand for dollars against
a trickle of greenbacks into the market, traders said.
By
1230 GMT market on Thursday, commercial banks quoted the shilling at 88.30 to
the dollar, down from last Thursday’s close of 88.05.
“It
looks like the shilling is going to weaken with end-of-month payments of
imports by the oil and manufacturing sectors,” said Sheikh Mehran, head of
trading for I&M bank.
Kenya’s
currency has
weakened for the past two weeks as banks started buying the dollar
on signs that a domestic funding crunch was easing. However, some analysts say
the problem has not gone away.
Mehran
said inflows of dollars would be limited, with the tea, tourism sectors beset
by dwindling earnings.
Kenya’s
tea exports have fetched lower prices all year due to over-production, while
its tourism business slid into crisis because of frequent deadly attacks blamed
on Islamists from neighbouring Somalia.
Worries
over the industry’s performance have grown due to the Ebola outbreak in west
Africa that has caused at least one airline, Korean Airlines, to suspend its
flights to Kenya, even though the east African hub itself has not seen any
cases.
TANZANIA
Commercial
banks in east Africa’s second-biggest economy quoted the shilling at
1,665/1,675 to the dollar on Thursday, weaker than 1,660/1,670 a week ago.
“The
shilling has been weakening over the past week and is expected to continue
depreciating in the coming week,” said Hakim Sheikh, a dealer at Commercial
Bank of Africa, Tanzania.
“The
shilling is under pressure because of the easing of the liquidity squeeze on
the local currency, which has ushered in a rise of demand for dollars from oil
and construction sectors.”
The
Bank of Tanzania said on its website it traded $55.5 million on the interbank
foreign exchange market over the past week.
UGANDA
Month-end
dollar inflows during a period of low corporate demand should lend some support
to Uganda’s shilling next week, traders said.
At
1123 GMT commercial banks quoted the shilling at 2,600, slightly firmer than
last Thursday’s close of 2,605.
“I
suspect the shilling will be stuck in 2,600-2,615 range since not much is
happening on the demand side. But as we eye month-end inflows the bias will be
on the appreciation side,” said Benon Okwenje, trader at Stanbic Bank.
Month
end flows normally come in from charities converting dollars to pay salaries.
The
shilling has strengthened in recent days, underpinned by weak demand from
private firms and attractive government bond yields. The unit is also seen
stronger after a court overturned an anti-gay law that drew Western criticism
and halted aid payments.
Businessday
No comments:
Post a Comment