African currency outlook

Kenya's shilling could hit new lows against the dollar next week while its Ugandan peer will probably have to rely on central bank intervention to stay on an even keel.
KENYA Kenya's shilling, which hit all-time lows on Wednesday and Thursday, is expected to keep weakening if the central bank continues to buy foreign currency and importers step up dollar buying as usual towards the end of the month.
The Central Bank of Kenya (CBK) has bought 28 million euros and mopped up 6 billion shillings, which it said on Thursday was meant to build reserves and cover for external payments amounting to $9.1 million.
The commercial banks quoted the shilling at 86.20/30 against the dollar, after it earlier hit an all-time low of 87.15 sparked by central bank purchases of euros.
UGANDA Uganda's shilling is likely to stay weak amid fears of further violent political protests, although it probably will not breach the psychological 2,400 level.
Commercial banks quoted the currency at 2,389/2,393 to the dollar, a shade weaker than 2,384/2,389 a week ago, when the inauguration of President Yoweri Museveni was marred by deadly clashes between police and opposition supporters.
TANZANIA Tanzania's shilling weakened on Thursday due to strong dollar demand from the oil sector and traders expect it to remain under pressure until mid-June when the agriculture export season kicks in.
Commercial banks quoted it at 1,530/1,538 to the dollar compared with 1,515/1,520 at last Thursday's close. "The central bank has been selling dollars in the market not to support the shilling, but for liquidity purposes," said African Banking Corporation trader Gladness Deogratias.
NIGERIA The naira is expected to fall amid strong dollar demand and a lack of local supply. It was trading at 156.92 to the dollar on Thursday from its Wednesday close of 156.70 after the central bank failed to meet all the demand at its bi-weekly auction on Wednesday.
"There has been strong pressure on the available dollars in the interbank market as a result of tight liquidity and consistent depreciation of the naira at the official window," one dealer said.
Dealers said the bulk of the unmet demand at the official window was redirected to the interbank market, putting further pressure on the available dollars floating round Africa's biggest oil producer. The central bank sold $300 million at 153.21 to the dollar at its auction on Wednesday, short of the $389.86 million demanded and the $499.89 million sold at 153.05 at Monday's auction.