East African currencies slide
Jun 16, 2011
NAIROBI - Kenya’s shilling may continue its freefall against the dollar next week amid calls for decisive action by the country’s central bank, while the Ugandan and Tanzanian shillings are also staring at record lows.
NAIROBI - Kenya’s shilling may continue its freefall against the dollar next week amid calls for decisive action by the country’s central bank, while the Ugandan and Tanzanian shillings are also staring at record lows.
The Uganda shilling may well hit fresh all-time lows in the week ahead, undermined by tight dollar supplies and persistent demand, especially from the energy sector, traders said.
Commercial banks quoted the local currency at 2,430/2,435 to the dollar, compared with last Wednesday’s closing price of 2,400/2,405. Uganda’s markets were closed last Thursday for a national holiday.
“There’s still lots of outstanding demand out there especially on the corporate side and inflows have been anaemic. We don’t see any discernible improvement (ahead),†said Mark Bitarabeho, a trader at Standard Chartered Bank Uganda.
In Kenya, importer demand for dollars and further bouts of heavy buying could see Kenya’s shilling plumb new depths in the week ahead, after it traded at a record low of 90.85 on Thursday, traders said.
The shilling was quoted at 90.85/91.05 against the dollar -- after falling 2.48% in intraday trading -- and far weaker than last Thursday’s close of 87.60/70.
“The pricing gap right now has moved from 10 cents to 50 cents, which means we could jump by one shilling or more. We are trading in a volatile market,†said a senior trader.
“If more panic buying hits the market we could see the shilling depreciate further.â€
Traders said they also expected dollar demand from the energy and grain sectors, which could pressure the local currency further.
Tanzania’s shilling is seen hovering just shy of its record low of 1,595 touched on June 9, with broad demand for the greenback keeping the local currency under pressure.
Commercial banks quoted the shilling at 1,575/1,580 to the dollar, compared with 1,585/1,595 a week ago.
“The shilling currently seems to be trading at a very stable range of 1,570 to 1,580,†said a trader.
Reuters
The Uganda shilling may well hit fresh all-time lows in the week ahead, undermined by tight dollar supplies and persistent demand, especially from the energy sector, traders said.
Commercial banks quoted the local currency at 2,430/2,435 to the dollar, compared with last Wednesday’s closing price of 2,400/2,405. Uganda’s markets were closed last Thursday for a national holiday.
“There’s still lots of outstanding demand out there especially on the corporate side and inflows have been anaemic. We don’t see any discernible improvement (ahead),†said Mark Bitarabeho, a trader at Standard Chartered Bank Uganda.
In Kenya, importer demand for dollars and further bouts of heavy buying could see Kenya’s shilling plumb new depths in the week ahead, after it traded at a record low of 90.85 on Thursday, traders said.
The shilling was quoted at 90.85/91.05 against the dollar -- after falling 2.48% in intraday trading -- and far weaker than last Thursday’s close of 87.60/70.
“The pricing gap right now has moved from 10 cents to 50 cents, which means we could jump by one shilling or more. We are trading in a volatile market,†said a senior trader.
“If more panic buying hits the market we could see the shilling depreciate further.â€
Traders said they also expected dollar demand from the energy and grain sectors, which could pressure the local currency further.
Tanzania’s shilling is seen hovering just shy of its record low of 1,595 touched on June 9, with broad demand for the greenback keeping the local currency under pressure.
Commercial banks quoted the shilling at 1,575/1,580 to the dollar, compared with 1,585/1,595 a week ago.
“The shilling currently seems to be trading at a very stable range of 1,570 to 1,580,†said a trader.
Reuters