Uganda, Tanzania shillings firm vs dlr, Kenya steady
May 29, 2008
The Tanzania and Uganda currencies firmed against the dollar in the week to Wednesday, while the Kenya shilling held steady, dealers said.
KENYA
The Kenyan unit <KES=> remained stable against the greenback amid uncertainty over the mode of payment for the region’s biggest initial public offering in mobile phone firm Safaricom [SCOM.NR].
AT 1230 GMT commercial banks posted the local unit at 61.90/62.00 against the dollar compared with last Wednesday’s close of 61.85/95.
“It has been pretty range-bound. When you have mixed signals, you don’t want to be caught on the wrong foot, you would rather play it close to square,” said Duncan Kimani, a trader at Bank of Africa Kenya.
Allocations for the share offer will be announced on Friday. Offshore investors, who have a 35 percent share of the issue, are then expected to make their payments.
Dealers said they were not sure whether the money would be channelled through the central bank or commercial banks.
Central Bank Governor Njuguna Ndung’u told Reuters last week that he expected the flows to have a minimal impact on the local unit’s strength.
Robert Aloo, a dealer at Kenya Commercial Bank, said there was no clear signal on how the money would be channelled in, creating uncertainty.
“The market is generally in a wait and see mode,” he said.
“But this will blow over by next week. We will be looking at other fundamentals.”
Dealers saw the shilling trading at 61.50-62.50 against the dollar in the coming week.
TANZANIA
The Tanzania shilling <TZS=> gained marginally during the week, partly due to the central bank selling dollars and dealers said expectations of greenback receipts from agricultural export would boost the local currency.
The shilling traded at 1,185/1,195 per dollar compared with last Wednesday’s closing level of 1,202/1,208.
“We are heading into June and we expect inflows from the agriculture sector,” said Christopher Makombe, head of trading Standard Chartered Bank Tanzania.
Makombe added that inflows from tobacco and cotton would be coming in June through to July, thus boosting the shilling.
Dealers said that the central bank had been selling dollars during the week, contributing to the local unit’s firming.
According to data on the Bank of Tanzania Website, the bank traded $34.55 million on the interbank foreign exchange market between last Wednesday and Tuesday.
Dealers said they expected the shilling to trade between 1,150 and 1,200 in the coming week.
UGANDA
The Uganda shilling <UGX=> also firmed marginally against the dollar in sluggish trade and dealers said charitable organisations were converting greenbacks for salaries at the end month.
Kampala commercial banks posted the shilling at 1,625/1,630 to the dollar compared with 1,628/1,633 a week ago.
“We are not seeing a lot of activity. There is some demand in the market but this has been evenly matched by end-month inflows from international agencies,” said Catherine Bulinda, head of treasury at Centenary Bank Uganda.
Stanbic Bank Uganda said in a market report the shilling would remain strong in the coming days due to end-month inflows.
The local unit is expected to trade in the 1,620-1,630 range against the dollar in coming days, dealers said. (Reporting by Duncan Miriri in Nairobi and Susan Nabadda in Kampala) (Editing by George Obulutsa)
Source: Reuters
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