African currency outlook

The Nigerian naira is seen firming in the next week to Wednesday if the country's elections are credible and peaceful, while Kenya's shilling could weaken due to dollar demand from the oil sector, traders said.
NIGERIA Nigeria's naira could start appreciating if presidential elections on Saturday are credible and violence-free, with foreign investors likely to view a victory by incumbent President Goodluck Jonathan as a sign of stability.
"There is a significant disconnect between risk sentiment onshore and offshore. Locals shifted to the dollar and will go long naira again," said Samir Gadio, emerging markets strategist at Standard Bank. The central bank sold $300 million at 152.58 a dollar at its bi-weekly foreign exchange auction on Wednesday, below demand of $444 million.
KENYA The Kenyan shilling is seen gaining ground due to tight market liquidity, as traders look to sell long foreign currency positions and keenly watch the country's central bank, but dollar demand from oil companies could dampen that. Commercial banks quoted the shilling at 84.10/20 to the dollar, compared with last Thursday's close of 84.40/50.
Traders said there was increased overnight lending at high interest rates that are expected to drag into next week. Central Bank of Kenya injected 5.7 billion shillings on April 6 at a weighted average of 2.976 percent. "The high overnight lending is a disincentive to hold long dollar positions. Interbank players are likely to sell these positions in preference for the shillings," said Mwambu Malamba, a trader at Commercial Bank of Africa.
UGANDA The Ugandan shilling is seen slightly weaker against the dollar, due to demand from the oil sector. Commercial banks quoted the local currency at 2,350/2,360 against the dollar, compared with last Thursday's close of 2,345/2,350.
"We expect the shilling to weaken a little bit as corporates come to buy and push it a little bit - basically oil companies' (dollar) demand," said Peter Mboowa, a trader at Kenya Commercial Bank Uganda.
TANZANIA The Tanzanian shilling is expected to come under more pressure from corporate demand in the coming week. Commercial banks quoted the local currency at 1,510/1,515 to the dollar compared with 1,502/1,507 at the close of last Thursday's session.
"After remaining stable for the past week, speculation kicked in. If we see serious demand from telecoms and energy sectors, the shilling could further weaken next week," said CRDB Bank trader Frank Ndugulile.