NAIROBI – The Tanzanian shilling is seen weaker on oil sector demand for dollars while the Kenyan shilling looks set to be pressured by tight liquidity, but the Ugandan currency is expected to rise on strong dollar inflows.
NAIROBI – The Tanzanian shilling is seen weaker on oil sector demand for dollars while the Kenyan shilling looks set to be pressured by tight liquidity, but the Ugandan currency is expected to rise on strong dollar inflows.Tanzania’s shilling is seen under pressure in the coming days, weighed down by strong demand from oil importers and declining dollar inflows, traders said.Traders in Tanzania’s commercial capital Dar es Salaam quoted the shilling at 1,611/1,621 to the dollar on Thursday, stronger than 1,620/1,630 a week ago."The shilling is expected to remain under pressure from the oil sector and other importers next week because we are seeing very little inflows of dollars into the market,” said Theopistar Mnale, a trader at Tanzania Investment Bank.Market participants said the shilling was likely to trade in the 1,610-1,620 range in the days ahead.On the other hand, the Kenyan shilling will be affected by the squeeze on liquidity, which has been supporting the currency, loosens due to government debt redemptions.The shilling slipped for the first time in seven sessions to 87.30/50 against the dollar yesterday, but was still stronger than last Thursday’s close of 87.55/75."We’re expecting some bond maturities next week that will ease liquidity a bit and weight on the shilling,” said Pally Muchiri, a senior trader at Co-operative Bank.Meanwhile, the Uganda shilling is seen firming against the dollar in coming days as upcoming elections in neighbouring Kenya dampen importers’ dollar demand on fears of delays to imports.The March presidential vote in Kenya is the first since a disputed election in 2007, which unleashed nationwide violence, blocking major trading routes of landlocked countries including Uganda and Rwanda which depend on Kenya’s Mombasa port.Commercial banks posted the shilling at 2,635/2,645 to the dollar yesterday, stronger that last Thursday’s close of 2.650/2,660."(Importers) are cautious of goods being held at the (Kenyan) port,” said Robert Aloo, the head of trading at Kenya Commercial Bank-Uganda.Traders said importers had already made purchases of commodities such as fuel, while others were planning to resume business after the Kenyan elections.