Uganda's shilling weaker, Kenya's under pressure this week

The Ugandan shilling is expected to weaken next week and Kenya’s to come under pressure amid month-end dollar demand.

At 0949 GMT on Friday, commercial banks quoted the shilling at 3,683/3,693, compared with last Thursday’s close of 3,683/3,693.

“Typically from around September we tend to see elevated demand (for dollars) from importers of goods like textiles, electronics, leather products and others,” said an independent foreign exchange trader in Kampala.

He said the shilling would trade between 3,685 and 3,710, probably towards the weaker side.

Tanzania’s shilling is expected to gain as inflows increase from tourism and agriculture.

Commercial banks quoted the shilling at 2,292/2,302 on Thursday, up from 2,293 to 2,303 recorded last week, a trader in at Dar es Salaam told Reuters.

"The shilling has been stable for the last two weeks and it keeps appreciating,” he said. “We expect more stability and further appreciation next week due to increase in inflows from the tourism sector as we are in the tourism season and from agriculture exports.”

He also expects demand side to be driven by energy and manufacturing. The Kenyan shilling will be under pressure in the coming week amid demand for dollars from energy and manufacturing companies, traders said.

At 1048 GMT, commercial banks quoted the shilling at 103.45/65 per dollar, compared with 103.10/30 at last Thursday’s close.

“The driving factor would be liquidity and end of month demand ... we’ve seen the regulator intervening aggressively on the money market side,” said a senior trader from one commercial bank.

The Nigerian naira is expected to gain next week following the end of loan repayments and dividend repatriation season and improvement in dollar liquidity as the central bank auctions debt. The currency was quoted at 362.85 on Thursday, up from last week’s 364.