African currencies week ahead: Zambia bond to lift kwacha, naira eyes rate meeting

Zambia's kwacha is likely to firm after issuing a Eurobond of as much as $2 billion, one of frontier Africa's biggest international bonds, while Nigeria's naira could be affected by Friday's rate-setting meeting.
ZAMBIA: The kwacha could strengthen next week on plans by Zambia to issue a 10-year Eurobond of as much as $2 billion on Thursday, traders said.
At 0910 GMT on Thursday, commercial banks quoted the currency of Africa's No 2 copper producer at 7.6350 per dollar, stronger than 7.7200 at which it closed a week ago.
"This development could give the kwacha a boost in the short term," the local unit of South Africa's First National Bank (FNB) said in a note referring to the bond sale.
The kwacha should get further support from the easing of the Greek debt crisis and signs of recovery in top copper consumer China, Zambia's central bank governor has said.
NIGERIA: The naira could take cue from the central bank's rate-setting meeting due on Friday, traders said, as the regulator tweaked its exchange rate peg to 197 naira against the dollar from the 196.95 it set last week.
"We are very optimistic that the central bank would come out with some measures to support the naira at the end of its MPC meeting on Friday," one dealer said.
The local currency traded at 199.50 to the dollar on the interbank market at 1047 GMT, compared with the 197 per dollar rate it closed at on Wednesday. The bank introduced tight controls on the foreign exchange market in February At the parallel market, the naira slid to 243, down 0.83 percent from the previous day. A Reuters poll showed the bank could hold interest rates for now.
KENYA: The shilling could strengthen if an acute shortage of liquidity in the money markets persists, making it expensive to hold dollars. The local currency was trading at 100.35/45 in early trading on Thursday, up from 102.45/65 last week, after overnight lending rates jumped on the interbank market, forcing banks to cut their dollar holdings. "We could trade below 100 if rates continue upward," said a trader at a commercial bank.
TANZANIA: The shilling is expected to strengthen, buoyed by inflows from tourism and non-governmental organisations (NGOs) and a slowdown in demand for greenbacks from oil importers. Commercial banks quoted the shilling at 2,060/2,080 to the dollar on Thursday, stronger than 2,140/2,150 a week ago. "The shilling ... could rally to the 1,990-2,000 range on the back of inflows from tourism and NGOs," said Sameer Remtulla, a dealer at Commercial Bank of Africa Tanzania.
UGANDA: The shilling is forecast to weaken due to increased dollar demand from manufacturers and the energy sector as well as possible appetite for the US currency from banks. Commercial banks quoted the shilling at 3,310/3,320, a touch stronger than last Thursday's close of 3,320/3,330.
"There's an uptick in appetite from corporates mainly from manufacturing and energy sector," said Faisal Bukenya, head of market making at Barclays Bank. "The tone in the coming days is likely to be bearish overall."
GHANA: Ghana's cedi is expected to remain flat as the central bank steps up dollar sales to match increasing demand for hard currency, traders said. The dollar-cedi rate has remained stable within the 3.2500-3.3500 band in the last week. The cedi slumped around 25 percent in the first half of this year but has recovered most of its losses on central bank support. "We see demand picking up from offshore buyers but this may be neutralized by the robust intervention we are seeing from the central bank," Geoffrey Barnes, a currency analyst at the Accra-based Providence Research said.