TANZANIA’S shilling is likely to hold steady against the U.S. dollar this week while Kenyan and Ugandan currencies are expected to weaken, Reuters news agency reported citing traders.
The Tanzanian shilling is expected to hold steady and possibility gain ground, helped by dollar inflows from the tourism sector and mining companies.
Commercial banks quoted the shilling at 2,310/2,320 per dollar, the same as last Thursday’s close. “Dollar supply will improve due to the inflows from tourism as we are heading to high tourism season and we are seeing some big mining companies coming into market to sell dollars,” a trader at one commercial bank said.
The Kenyan shilling is expected to remain under pressure from increased dollar demand in the energy sector and excess liquidity in money markets. Commercial banks quoted the shilling at 100.95/101.15 per dollar, compared with 100.65/85 at last Thursday’s close. “(Dollar) buyers who were inactive are stepping back in to meet their requirements,” said a senior trader at a Kenyan bank.
The Ugandan shilling is expected to weaken on the back of a slowdown in yields on government debt, which could dent offshore investor interest. Commercial banks quoted the shilling at 3,750/3,760, compared with last Thursday’s close of 3,735/3,745.
“Yields (on debt) have come off and that won’t favour the currency going forward. Overall I am of the view the local unit will trade in a vulnerable position,” said Robert Mpuuga, head of treasury at Bank of Africa.
Rates on Ugandan debt declined at this week’s auction. The central Bank of Uganda is due to sell three-year and 15-year Treasury bonds on April 17.00