African currencies week ahead: volatile Zambian kwacha seen steady, Kenyan shilling may strengthen

Zambia's kwacha is expected to hold steady next week following a 17 percent plunge to a record low on Monday triggered by a sharp slide in copper prices and a ratings downgrade, while rising yields on government securities may help Kenya's shilling.
ZAMBIA: The kwacha is expected to remain steady against the dollar next week, supported by three successive days of intervention from the central bank this week and support from a Treasury bill auction due later on Thursday.
At 0855 GMT on Thursday, commercial banks quoted the currency of Africa's No 2 copper producer at 11.4500 per dollar, down from 10.6100 a week ago. "The kwacha should hold steady against the dollar ... with help coming from the central bank and today's Treasury bills auction," Zambia National Commercial Bank (ZANACO) said in a note.
KENYA: The shilling may strengthen, supported by inflows of foreign exchange from offshore investors chasing rising yields on government securities amid tight shilling liquidity. By 0806 GMT on Thursday, the shilling was trading around one-month highs at 104.30/50 to the dollar. It almost touched an all-time low of 106.80 earlier this month, under pressure from global dollar strength and a widening trade gap.
"The liquidity crunch in the market and the government T-bills and government securities, which are providing very high yields, should attract offshore investors," said one senior dealer, adding the shilling could strengthen to below 104 to the dollar. Yields on Treasury bills soared at Wednesday's auction, rising above 20 percent on both 182-day and 364-day bills. Overnight lending rates also reached 27 percent this week, up from 13 percent in early September.
TANZANIA: The Tanzanian shilling is likely to remain stable or weaken slightly in the days ahead, weighed down by corporate demand for dollars. Commercial banks quoted the shilling at 2,165/2,175 to the dollar on Thursday, slightly weaker than the 2,160/2,170 of a week ago.
"The shilling will likely depreciate slightly against the dollar next week, or it could remain in the same levels if it receives support," said Nyanjula Selemani, a dealer at Commercial Bank of Africa Tanzania.
UGANDA: The shilling is forecast to hold steady as demand for hard currency from corporates and interbank players eases. Commercial banks quoted the shilling at 3,688/3,698 to the dollar, weaker than last Wednesday's close of 3,655/3,665. Last Thursday was a public holiday in Uganda. "We had corporates in over last couple of days doing end-month (dollar) stock-up," said a trader from a leading commercial bank. "Most firms are now done with that. I think demand will slow a bit so we'll probably see the shilling play stable, slightly below 3,700."
NIGERIA: The naira is seen steady on both the official interbank market and the unofficial window after the central bank adjusted its exchange rate peg slightly on Wednesday. The bank adjusted its exchange rate peg to 196.95 naira against the dollar from the 197 set since July.
The currency traded at 222 to the dollar on the parallel market on Wednesday, slightly stronger than its close on the unofficial market on Tuesday, 224, but the same level as last week. On the interbank market, the naira closed at 196.50 to the dollar, from 197 a dollar last week. Thursday was a holiday. "With the continued support for the naira by the central bank, we don't see much change in the near term," one dealer said.
Nigeria's central bank has ruled out any plan to devalue the naira in the near term.
GHANA: The cedi is expected to rally to 3.7 or 3.6 against the dollar in the next week due to expected inflows from a dollar loan taken out each year by the government to fund cocoa purchases, traders said. The cedi, which rebounded strongly in July after slumping nearly 30 percent in the first half of the year, was trading at 3.6900 at 1039 GMT on Thursday. Industry regulator Cocobod on September 18 signed a $1.8 billion loan in Paris for the 2015/16 crop purchases. Ghana also plans to issue a fourth Eurobond of up to $1.5 billion in late September for debt restructuring and budget financing.