African currency outlook

Kenya's shilling may fall to a lifetime low against the dollar next week due to continued central bank buying of dollars and euros, while Ghana's cedi may benefit from foreign interest in its high-yielding debt.
KENYA Kenya's shilling is seen sliding further in the next week, and may even breach a lifetime low of 87.15 against the dollar if the central bank continues to build up reserves by buying hard currency. Since May 10, it has regularly bought euros and mopped up shillings through repurchase agreements, in keeping with an intention to curb soaring inflation through tighter monetary policy.
The shilling was trading at 86.70/90 against the dollar, weaker than last Thursday's close of 85.60/70. "87.15 is looking very tricky," said Bethuel Karanja, head of trading at CFC Stanbic. "If it gets a catalyst in terms of continued purchases, then it will break through."
UGANDA The Ugandan shilling is expected to hold steady against the dollar as dwindling foreign currency inflows are met by little demand, traders said. Commercial banks quoted the local currency at 2,390/2,395, a slight appreciation from last Thursday's close of 2,392/2,397, but still in the tight range it has occupied for the last month.
Uganda's central bank sees the currency as undervalued and intervened last month by selling dollars to keep it from sliding to the psychologically key 2,400 level.
TANZANIA The Tanzanian shilling is likely to remain volatile after it hit an all-time low against the dollar last week. Commercial banks quoted the local currency at 1,540/1,549 to the dollar compared with 1,550/1,555 a week ago. Traders said it would probably trade in the 1,540-1,550 range.
NIGERIA The naira was trading at 155.80 to the dollar on Thursday against 155.95 at Wednesday's close. Dealers said the naira should trade around 155.20-155.40 next week with the support of dollar inflows from the NNPC and continued high dollar supply at central bank auctions.
GHANA The cedi may gain against the dollar if results due on Friday of a 3-year, 300 million cedi bond show strong foreign appetite, although any appreciation is likely to be capped at the psychologically key 1.5 level, traders said. The unit has held steady this week in the run-up to the bond, which is open to foreigners, and was trading at 1.5075/00 on the interbank on Thursday.