East Africa units seen mixed vs US$ in week ahead

Invisible · 2008-12-10T17:03:47+00:00

The Kenya shilling is expected to hold steady against the dollar in the week to Wednesday, dealers said, while the Ugandan currency is seen weakening and Tanzania's unit is forecast to have mixed trade. KENYA Kenya's shilling (KES=) is expected to hold steady and trade in a tight range, possibly firming, as market activity slows down ahead of the Christmas holiday season. At 1200 GMT commercial banks quoted the local unit at 78.20/30 to the dollar, compared with last Wednesday's close of 79.55/75. The shilling is seen trading in the 78.50-79.00 range against the U.S. currency in the coming week. "Looking at next week, given the Christmas holiday, I am expecting it to go down -- the shilling gaining. I am not seeing much activities and I am seeing companies shutting down," said Jamila Makii, a dealer at Gulf African Bank. Dealers said during the week the shilling strengthened, helped by flows from the farm sector among others. The shilling's day-to-day movements are largely driven by dollar proceeds from areas like agriculture and tourism, which strengthen it, and by importer demand from sectors like energy, telecoms and manufacturing, which makes it weaker. TANZANIA The Tanzania shilling (TZS=) was forecast to see mixed trade in the coming week, holding steady and possibly easing due to dollar demand from the energy and manufacturing sectors, or firming due to less activity ahead of the holidays. Commercial banks quoted the shilling at 1,290/1,300 to the dollar, compared with last Wednesday's close of 1,280/1,290. Dealers said they expected it to trade in the 1,270-1,300 range over the coming days. "We are expecting the shilling to stabilise because we are approaching the end of the year, or appreciate a bit because there's not much trade in the market because people are going on holiday," said Fred Siwali, a dealer at CRDB Bank. Other dealers said they expected the local unit to weaken, because there was still some dollar demand from the telecoms, manufacturing and energy sectors, which had also led to the shilling easing in the past week. The shilling will receive a boost from central bank selling the U.S. currency, dealers added. UGANDA Uganda's shilling (UGX=) is seen weakening against the dollar in the coming days, undermined by demand for the U.S. currency and low inflows, dealers said. Commercial banks in Kampala quoted it at 1,960/1,970 to the dollar, compared with last Wednesday's rate of 1,970/1,980. Dealers said they saw it trading in the 1,960-2,000 range during the week, with a bias for weakening. "We expect the local unit to weaken as demand is currently outstripping the available supply," said Denis Mushabe Mashanyu, a dealer at Standard Chartered Bank Uganda. The shilling appreciated in the morning to trade at 1,950/1,960 from the previous close of 1,980/1,990, but backtracked as corporate demand returned to the market. NAIROBI, Dec 10 (Reuters) (Reporting by Susan Nabadda in Kampala and George Obulutsa in Dar es Salaam; Editing by Ron Askew)

Thread starter Invisible
Start date Dec 10, 2008

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East Africa units seen mixed vs US$ in week ahead

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