Kenya’s shilling is expected to weaken against the dollar this week , while Uganda’s will strengthen, traders said.
The Kenyan shilling could come under pressure from end-of-month dollar demand from the energy sector and multinational companies paying dividends.
Commercial banks quoted the shilling at 107.00/20 per dollar, compared with 106.70/90 at last Thursday’s close.
“We’re at month end… we’ve seen a number of banks announcing dividend payments, so there could still be some demand,” a senior trader from one commercial bank said.
Tanzania’s shilling is expected to hold steady, with dollar demand from the energy sector matching supply from mining exports.
Commercial banks quoted the shilling at 2,309/2,319 on Thursday, the same as last week.
“The demand is likely to be driven by the oil importers as we don’t see much from manufacturers. On the supply side, we expect the mining sector to bring in some dollars,” a trader at one commercial bank in Dar es Salaam said.
The Ugandan shilling is expected to firm, drawing support as the central bank removes excess liquidity.
At 1016 GMT, commercial banks quoted the shilling at 3,775/3,785, compared to last Thursday’s close of 3,785/3,795.
On Thursday the central Bank of Uganda took out a total of 839 billion shillings ($221.96 million) from the interbank market.
“I see the unit moving down a little bit (strengthening),” said a trader from a leading commercial bank, citing potential support from the liquidity removal.
The kwacha is expected to remain range-bound, supported by dollar sales ahead of tax payments on June 10.
On Thursday, commercial banks quoted the currency of Africa’s second largest copper producer at 18.2800 per dollar from 18.0440 at close a week ago.
“There is Pay As You Earn (tax) coming and that should give support to the kwacha,” one commercial bank trader said. Credit : Reuters