NAIROBI, Dec 14 (Reuters) - The Ugandan and Tanzanian shillings are expected to hold their ground against the dollar in the next week, while Nigeria's naira is forecast to weaken, traders said.
The Kenyan shilling is expected to hold steady due to
thin market activity ahead of the holiday season. Commercial banks quoted the shilling at 103.05/15 against the dollar. "When the market is thin you might find what in other instances we consider to be a small order might move the market," said a trader at one commercial bank.
UGANDA Market players are eyeing a key rate decision by the Ugandan central bank expected next week before taking positions in the shilling. Commercial banks quoted the shilling at 3,615/3,625, slightly stronger than last Thursday's close of 3,620/3,630. Benon Okwenje, trader at Stanbic Bank, said the shilling's next direction would "come down to the CBR (central bank rate) decision".
The Tanzanian shilling is likely to remain firm due
to a slowdown in demand for U.S. dollars from importers towards the festive season and dollar inflows from the agriculture sector. Commercial banks quoted the shilling at 2,240/2,244 to the dollar on Thursday, barely moved from 2,241/2,244 a week ago. "We expect the shilling to trade in the same levels next week, supported by U.S. dollar inflows from ongoing cashew nut exports," said a trader at CRDB Bank.
The kwacha is likely to hold its gains due to a
healthy supply of dollars and sluggish demand. Commercial banks quoted the currency of Africa's second-largest copper producer at 9.8950 per dollar, up from a close of 10.3950 a week ago. "Demand for the greenback has remained soft, with prospective buyers likely to hold off given the downward trend," the Zambian branch of South Africa's First National Bank said in a note.
The naira is under pressure. Nigeria repaid 340
billion naira worth of treasury bills on Thursday instead of rolling them over, in a move that lowered yields and prompted foreign buyers to exit. Traders say the sell-off has led to a bottleneck in the forex market with thin inflows as foreigners bid to buy dollars.
The cedi is seen trading flat as the central bank
continues to support it with regular dollar sales. The local currency has been fairly stable in the past week, trading at 4.5170 cedis to the dollar.
(Reporting by John Ndiso, Elias Biryabarema, Chris Mfula, Christian Akorlie and Chijioke Ohuocha; compiled by George Obulutsa; editing by Andrew Roche)