African currency outlook

Kenya's shilling is likely to strengthen next week away from record lows against the dollar, while foreign investor interest in a debt issue in neighbouring Uganda should also help to boost the currency there.
KENYA Kenya's shilling, which hit an all time-low of 87.15 on May 18, is likely to firm against the dollar over the next week, helped by tight liquidity due to the central bank mopping up shillings through repurchase agreements.
The Central Bank of Kenya has mopped up 20.5 billion shillings through repurchase agreements since May 11 and auctioned bonds worth 18 billion shillings on Wednesday. The currency was at 85.50/60 against the dollar, stronger than last Thursday's close of 86.15/25.
UGANDA Uganda's shilling is likely to strengthen due to dollar flows from foreign investors interested in buying high-yielding government securities. Commercial banks in Kampala quoted the shilling at 2,388/2,393 against the dollar, slightly weaker than last Thursday's 2,383/2,388.
"There's an upcoming treasury bill auction next week which could attract considerable offshore interest and that could jerk up inflows and strengthen the shilling," said Lucas Ochieng, treasurer at Orient Bank. The central Bank of Uganda is expected to sell 80 billion shillings ($33 million) of Treasury bills next week.
TANZANIA Tanzania's shilling hit an all-time low of 1,542/1,547 to the dollar on Thursday, and is likely to fall further amid month-end corporate dollar demand and a lack of central bank support. "It looks like it will continue depreciating unless we see some good support from central bank," said Hezron Musikwa, a trader at National Bank of Commerce.
"Customers were holding back on expectation that the shilling will come back. But after seeing that's not happening and their demands are falling due, they've come to the market to pick up dollars." Traders said they expected the unit to move in the 1,550-1,580 range over the next week, with possible panic buying of dollars triggering further declines.
GHANA A 300 million cedi ($199 million) bond due to issued on June and open to foreigners pushed up Ghana's cedi against the dollar on Thursday, and should fuel further gains in the currency. The cedi was quoted at 1.5035/60, up 0.53 percent from last week's close of 1.5115/40 as offshore investors sought cedis in advance to pay for the bonds ahead of settlement day. "Before the announcement the cedi was trading at 1.5055/80 and now it is trading at 1.5035/60," Stanbic's Christopher Nettey said.
ZAMBIA The kwacha is expected to remain stable against the dollar, with few factors expected that could have a serious bearing on the currency of Africa's top copper producer. Commercial banks quoted the kwacha at 4,735 against the dollar, a touch firmer that 4,740 a week ago. The kwacha has traded between 4,800 and 4,600 for most of this year.