African currencies outlook

Kenya's and Uganda's shillings are likely to come under pressure against the dollar next week, while Tanzania's steadily weakening currency may take brief respite after unusually stiff central bank intervention.
KENYA Kenya's shilling is seen weaker against the dollar next week, pressured by expected dollar demand from the energy sector and maize importers, traders said. Kenya is predicting increased maize importation after the government removed duties in June to address shortages and rising prices of the staple.
The shilling was posted at 89.75/89.85 against the dollar, weaker than last Thursday's close of 89.35/55. Traders said they expected the shilling to trade in the 89.80-91.00 range.
UGANDA The Uganda shilling will stay under pressure against the dollar next week, despite the introduction of a new benchmark lending rate, traders in the capital, Kampala, said. The Bank of Uganda launched the inaugural benchmark interest rate of 13 percent and a 5 percent core inflation target on Wednesday in a bid to tame price pressures that pushed inflation to a 17-year high in May.
The shilling slipped to a record low of 2,710 against the dollar last week on strong dollar demand from the oil sector, speculative trading and panic buying before the central bank stepped in and sold dollars.
TANZANIA Tanzania's shilling is expected to hold steady after firming slightly against the dollar on Wednesday after the central bank moved to calm the market.
ZAMBIA The kwacha is expected to firm as foreign investors convert dollars in order to pay local taxes. Commercial banks quoted the currency of Africa's leading copper producer at 4,820, marginally up from 4,830 to the dollar a week ago.
GHANA The cedi is seen holding firm against the dollar ahead of the issue of a 5-year bond open to foreigners on July 28, traders said. The unit is likely to close the week at 1.5160 versus the greenback and will remain steady at that level, said Jacob Brobbey of Barclays Ghana.
NIGERIA The naira is seen losing ground as traders miss out on dollars expected to be sold by state-oil firm NNPC, which instead went to the central bank.
The local currency was trading at 153.32 to the dollar on the interbank on Thursday compared with 152.60 at Wednesday's close as traders contended with lower-than-expected month-end dollar inflows. Dealers said the naira should trade within a 153-153.90 band. The naira appreciated to its strongest level in six months last week after the central bank initiated measures aimed at boosting dollar supply, reducing pressure on the local currency.