NAIROBI, Oct 21 Reuters - The Kenyan shilling is expected to weaken in the coming week, while the currencies of Zambia, Uganda and Tanzania are expected to be broadly stable.
The Kenyan shilling is expected to remain under pressure the next week due to robust demand for hard currency in the face of dollar shortages in the market.
At 0800 GMT, commercial banks posted the shilling at 110.95 111.15 per dollar, down from 110.75 95 at the close of last Thursday.
This will probably continue until something gives, said a senior currency trader at a commercial bank, referring to the need for the central bank to pump in more dollars into the market or for policymakers to raise rates.
The Zambian kwacha is likely to trade in a tight band next week, but with a bias towards minor depreciation, as demand for hard currency continues to outweigh supply.
On Thursday, commercial banks quoted the currency of Africa's second largest copper producer at 17.0500 per dollar from 16.8700 at the close of business a week ago.
We link the weakening bias to ongoing tight FX liquidity conditions, Zambia National Commercial Bank ZANACO said in a note.
The Uganda shilling is seen trading in a stable range in the coming days, supported by hard currency inflows from foreign investors looking to participate in an ongoing IPO by the country's largest telecom firm.
At 1024 GMT, commercial banks quoted the shilling at 3,600 3,610, compared to the close of 3,610 3,620 on Thursday.
Inflows from conversions by commercial investors participating in the IPO will offer some support, said a trader at one of the foreign banks.
MTN Uganda, a unit of South Africa's MTN Group is currently conducting an IPO in which it is selling 20% of its equity to the public.
Tanzania's shilling is expected to hold steady next week, thanks to support from inflows from foreign investors and agricultural exports.
Commercial banks quoted the shilling at 2,295 2,305 per dollar, stronger than 2,300 2,310 recorded a week earlier.
We expect the shilling to remain stable due to inflows from investors and agricultural commodities such as coffee and cashew nuts, said Terry Karanja, a treasury associate at AZA, a Nairobi-based foreign exchange trading firm.