Kenya's shilling is likely to firm next week after a robust response from government to try to stem its downward spiral, while its Ugandan counterpart may also be bottoming out of a long slump as soaring bond yields attract foreign buyers.
KENYA Kenya's shilling is seen getting support from the central bank after it sold the US currency for the first time in two years and the government said it had asked the International Monetary Fund (IMF) to front-load a credit facility. The shilling strengthened 0.64 percent after his remarks to 93.60/80 against the dollar, stronger than last Thursday's close of 93.90/94.00.
UGANDA The Ugandan shilling is forecast to remain under some pressure against the dollar next week but traders said a slight rally on Thursday suggested rising yields on government paper may be attracting foreign support. Commercial banks in Kampala quoted the unit at 2,800/2,810 compared with last Thursday's closing price of 2,810/2,820.
"Over the next week the shilling will remain relatively weak as we have seen throughout this year but it won't drop sharply. It will not slide past 2,830," said a trader at one of Uganda's leading commercial banks.
TANZANIA Tanzania's shilling is expected to stay on the back foot due to demand for dollars from oil importers and diminishing inflows. Commercial banks quoted the currency at 1,626/1,631 to the dollar, compared with 1,620/1,625 at last Thursday's close. In the week to Wednesday, the Bank of Tanzania traded $35.45 million on the Interbank FX Market, according to its website.
NIGERIA The naira is likely to strengthen away from 11-month lows against the dollar in the early part of next week but could weaken after that as foreign exchange inflows from energy companies gradually dry up. The unit was trading at 154.90 to the dollar on the interbank market on Thursday, firmer than Wednesday's close of 156.15, following large dollar inflows from state-owned energy company NNPC.
GHANA The cedi is expected to inch down further against the greenback if the central bank does not intervene and supply dollars to the local market for a fourth week running, traders said. Standard Bank's Christopher Nettey quoted the cedi at 1.5345/70 on Thursday, and traders said the absence of central bank support could push the currency down to 1.54 - a level that has provided major support four times this year. The unit hit a record low of 1.575 on February 3.
ZAMBIA Zambia's kwacha is likely to remain flat as investors await clarity about the outcome of September 20 elections before taking positions. The currency has traded in the 4,600-4,800 band for most of the last 12 months, although the looming elections have caused it to weaken outside that band in the last month.
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