AFRICA-FX : Kenyan, Ugandan currencies seen firmer, Nigeria’s weaker


Kenyan and Ugandan currencies are likely to firm this week as Nigeria’s comes under pressure and Zambia and Tanzania’s hold steady.


The Kenyan shilling is expected to strengthen due to inflows from the diaspora and an emergency International Monetary Fund (IMF) loan to support the economy against the impact of the novel coronavirus outbreak, traders said.

Commercial banks quoted the shilling at 106.00/20 per U.S. dollar, compared with 107.20/40 at last Thursday’s close.

“We know that there is support coming in (from the IMF) because of COVID-19, it would help boost reserves…we expect diaspora remittances and horticulture to pick up as countries ease lock-down measures,” said a senior trader from one commercial bank.


The Ugandan shilling is expected to firm after the IMF last week Wednesday approved a $491 million emergency loan to help Uganda with the economic fallout from the novel coronavirus.

Commercial banks quoted the shilling at 3,795/3,805, compared to last Thursday’s close of 3,815/3,825.

“The loan is welcome news for the markets … there might be some lag before it’s disbursed but I expect an immediate positive sentiment that will support the shilling,” said one trader from a commercial bank.


Nigeria’s naira is seen easing this week after the central bank weakened the currency on the futures market offered mostly to foreign investors, traders said.

The naira, however, firmed on the over-the-counter spot and black markets this week after the central bank resumed dollar sales to help individuals with dollar expenses abroad and importers resume economic activities following a phased easing of a coronavirus lockdown.

But the bank is yet to sell dollars to foreign investors seeking to exit naira assets, with traders putting a backlog of demand at between $1.5 billion to $1.8 billion.

The currency was quoted at 386.93 naira per dollar on the spot market, mostly used by foreign investors and exporters.


The kwacha is likely to remain range-bound against the U.S. dollar this week with minimal market activity as the impact of COVID-19 hits production.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 18.3630 per dollar from 18.5760 at the close of business a week ago.

“It should remain within the 18-18.5 range per dollar. Some companies have closed and this has a bearing on the kwacha,” independent financial analyst Maambo Hamaundu said.


Tanzania’s shilling is also expected to hold steady this  week, traders said.

Commercial banks quoted the shilling at 2,309/19 on Thursday, the same levels as a week earlier.

“It is highly likely the shilling will remain stable next week. The demand and supply of dollars will almost match,” a trader in a commercial bank said.

Credit: Reuters

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