African currencies week ahead: Kenya shilling seen on back foot, Zambian kwacha firm

Kenya's shilling is likely to come under pressure next week but Zambia's currency is expected to hold firm.
KENYA - The Kenyan shilling could weaken in the coming week due to excess shilling liquidity in the money market, increasing demand for dollars, traders said. Commercial banks quoted the shilling at 100.45/55 per dollar, compared with 100.25/45 at last Thursday's close. "We are approaching end of cash reserve ratio cycle; there is an excess of shilling liquidity, that is, more Kenyan shilling chasing dollars," said a commercial bank trader.
ZAMBIA - The kwacha is likely to hold firm in the coming week due to reduced demand for dollars and hard currency conversions to pay taxes. On Thursday, commercial banks quoted the currency of Africa's No.2 copper producer at 9.8250 per dollar from a close of 9.93000 a week ago. "Demand for US dollars has significantly reduced and we have VAT (Value Added Tax) payments next week, so the kwacha should hold its gains," a commercial bank trader said.
TANZANIA - The Tanzanian shilling is expected to trade in a tight range or it could appreciate slightly against the US dollar in coming days, buoyed by subdued demand for greenbacks from importers. Commercial banks quoted the shilling at 2,276/2,286 to the dollar on Thursday, stronger than 2,283/2,288 a week ago. "The outlook for next week is that the shilling will probably be stable against the US dollar or it could strengthen marginally due to a slowdown in demand for foreign currency in the market at this moment in time," said a trader at Commercial Bank of Africa (CBA) Tanzania.
GHANA - Ghana's cedi is seen stable on conclusion of the government's Eurobond deal on Thursday, strengthened by a drop in annual inflation to a single digit, analysts and traders said. The cedi, like other emerging country currencies, has been under pressure in the past week as the dollar is propped up by US treasury yields. It was trading at 4.54 to the dollar by mid-morning on Thursday, compared to 4.52 a week ago. "We could see a comparatively stable pair in anticipation of new Eurobond inflows, backed by positive sentiments following a first-time single digit inflation in April," said currency analyst Joseph Biggles Amponsah.