African currencies week ahead: Nigerian naira to fall after open-market switch

The Nigerian naira is expected to fall next week as the country switches to a flexible, market driven exchange rate policy.
NIGERIA: The Nigerian naira could slide to a record low when the new open-market foreign currency trading announced by the central bank starts on Monday, traders said.
The central bank said on Wednesday it would abandon its 16-month fixed exchange rate policy. "We are expecting an initial wide depreciation of the naira at the official window, but the rate could stabilise at around the present black market rate of 370 depending on how much dollars the central bank will be willing to push into the market," said a senior trader.
KENYA: The Kenyan shilling is expected to ease slightly due to dollar demand from the energy sector, traders said. At 0915 GMT, commercial banks quoted the shilling at 101.15/25, compared with last Thursday's close of 101.10/20. "Appetite for dollars has picked up, but slightly. There's (demand from) the energy sector. We have seen it in the last few days," a trader at one commercial bank said.
ZAMBIA: The Zambian kwacha is likely to remain under pressure against the dollar due to a limited inflow of hard currency into Africa's second-largest copper producer. At 0907 GMT, commercial banks quoted the kwacha at 10.8900 per dollar, weaker than a close of 10.7000 per dollar a week ago. "Momentum remains to the upside as dollars in the market remain scarce," the Zambian branch of South Africa's First National Bank (FNB) said in a note.
GHANA: Ghana's cedi could rally against the dollar as corporate demand for dollars declines, while regular central bank sales continue, an analyst said. The local unit, which had been under pressure this month mainly due to repatriation of dollars by international companies, began to regroup this week. It was trading at 3.88 to the dollar at 1130 GMT, up from 3.9275 last week, according to Reuters data. "The cedi is likely to continue its rally as demand remains weak and traders and institutions are given little or no reason to buy and hold the dollar," analyst Joseph Biggles Amponsah said.
UGANDA: The Ugandan shilling is likely to strengthen, lifted by a central bank mop up of 657 billion shillings ($196.47 million) worth of excess liquidity and subdued appetite for hard currency from firms.
At 0930 GMT, commercial banks quoted the shilling at 3,344/3,354, little changed from last Wednesday's close of 3,340/3,350. Last Thursday was a national holiday in Uganda and markets were closed. "The one week repo and also low interest in the dollar should help give (the shilling) considerable support," said a trader at a leading commercial bank.
TANZANIA: The Tanzanian shilling is expected to trade in a stable range or appreciate marginally in the days ahead, underpinned by a slowdown in demand for US dollars. Commercial banks quoted the shilling at 2,188/2,198 to the dollar on Thursday, weaker than 2,187/2,197 a week ago. "We expect to see some demand for the shilling as we approach the end of the month because of the end of the current government fiscal year," said William Francis, a dealer at Commercial Bank of Africa Tanzania.