African currencies week ahead: Kenya's shilling seen outlier as African currencies struggle

Kenya's shilling could strengthen against the dollar next week, helped by good news from its large tourism sector, but other sub-Saharan Africa currencies are likely to stay under pressure as global growth concerns dent investor appetite.
KENYA: Traders expect a boost for the shilling after Kenya signed a partnership deal with the European Union and Germany lifted a travel advisory against visits to the town of Mombasa that it had issued in the wake of bomb attacks by Somali militants.
Commercial banks quoted the shilling at 89.10/89.20 to the dollar earlier on Thursday, marginally weaker than 89.00/89.10 last week. Traders also expected support for the shilling from the central bank, which regularly uses repo and term auction deposits to manage market liquidity.
"The money market is still overly liquid, and I think they should keep supporting the shilling," one trader said, predicting an 88.50 to 89.30 trading range for next week.
NIGERIA: Nigeria's naira was likely to feel the pressure from falling global oil price and as offshore investors continued dumping local stocks and bonds.
The stock market index fell 3.43 percent on Thursday, its biggest intraday decline in eight months, while bond yields climbed by about 25 basis points across the board. "The naira is likely to depreciate further in the days ahead, unless the central bank increases its intervention in the interbank market," one dealer said. The central bank has stayed out of the market this week after state-owned energy company NNPC, which accounts for the bulk of interbank dollar trade, sold around $350 million to some lenders.
TANZANIA: The Tanzanian shilling traded at 1,691/1,696 to the dollar, softening from 1,685/1,690 a week ago. "We have seen the depreciation of the local currency on account of increased demand from importers - mainly from the energy sector," said Hamisi Mwakibete, head of trading at Commercial Bank of Africa Tanzania.
"We might cross 1,700 levels if this continues," Mwakibete said, adding that the weakness could be offset by dollar flows from tourism and the central bank. The Bank of Tanzania said on its website it had traded $27.2 million on the interbank foreign exchange market over the past week.
UGANDA: Traders expected Uganda's shilling, which has shed nearly 6 percent of its value against the greenback so far in 2014, to retreat further on the back of strong seasonal year-end demand from importers and some commercial banks.
The currency traded around 2,675/2,685, down slightly from 2,670/2,680 a week ago. "Importers are expected to continue exerting pressure in the short term," said Faisal Bukenya, head of market making at Barclays Bank. "Limited appetite in the interbank will also remain. The tone for the shilling will be bearish in the short-term."
ZAMBIA: The kwacha was seen on the defensive as concerns about weak global growth and the spread of the Ebola virus weigh on investor appetite for emerging markets.
Commercial banks quoted the currency of Africa's second-largest copper producer at 6.3400/dollar versus 6.3100 last week. Pressure would also mount on the kwacha after companies finished paying local taxes on October 14, opening a window for renewed dollar demand, traders said.