African currencies week ahead: African currencies to wilt on China market rout, dollar buying

African currencies are expected to come under pressure next week as emerging markets weaken due to China's economic woes, especially Zambia, which exports copper to the world's second-largest economy. Other African currencies are seen weaker as dollar demand rises as trade picks up following the year-end holidays.
ZAMBIA: The kwacha will likely weaken due to a China market rout, which has fuelled demand worries for industrial metals like copper, Zambia's top export commodity.
At 1132 GMT, commercial banks quoted the currency of Africa second-largest copper producer at 10.9900 per dollar from 10.8200 a week ago. "We expect the kwacha to be pressured next week due to spillover effects from China, and renewed weakness in industrial metals," NKC African Economics economist Irmgard Erasmus said.
KENYA: The shilling is expected to ease due to increased dollar demand by companies, traders said. Commercial banks quoted the shilling at 102.05/15 to the dollar, compared with last Thursday's close of 102.20/30.
"We will see demand kick in. This week has been quiet," a trader at one commercial bank said. "As it is, we haven't got a number of calls from some of the corporates that usually buy the dollar, so we expect proper corporate activity to pick up."
UGANDA: The shilling is forecast to trade with a weakening bias, undermined by scant inflows weighing against rising dollar demand from exporters and banks. At 1001 GMT commercial banks quoted the shilling at 3,405/3,415, weaker than last Thursday's close of 3,365/3,375.
"Supplies are thin but on the demand counter we're expecting that appetite particularly from importers will start to gradually pick up," said a trader at a leading commercial bank.
TANZANIA: The shilling is expected to weaken, weighed down by demand for the US currency from oil and manufacturing sectors. Commercial banks quoted the shilling at 2,185/2,195 to the dollar on Thursday, weaker than 2,160/2,170 a week ago.
"The shilling will likely continue to depreciate marginally next week on the back of demand for dollars that is picking up from oil and manufacturing companies. We expect the shilling to touch 2,200 levels," said Sameer Remtulla, a dealer at Commercial Bank of Africa Tanzania.
GHANA: The cedi is expected to weaken as businesses begin to buy dollars for their first quarter import, traders said. The local currency, which weakened 16 percent in 2015, compared to more than 30 percent in the previous year, has been fairly stable in the 3.8200-3.8300 band in the past week.
"Amidst expectations of high demand for dollars during and immediately after the festive season, the cedi could come under some pressure in the coming week," Joseph Biggles Amponsah, analyst at the Accra-based Dortis Research said.
NIGERIA: The naira is seen weakening a little next week as more businesses resume from holidays and dollar demand rises. The local currency was quoted at 270 to the dollar on the parallel market on Thursday, weaker than 266 to the dollar last week. The naira traded at 199 to the dollar on the official interbank market as at 1126 GMT. Nigeria's naira was down 10 percent year-on-year last year due to demand pressure in the wake of falling global oil prices and measures by the central bank to conserve its forex reserves.