African currencies outlook: Uganda's shilling likely to slide

Uganda's shilling is expected to slide further next week as tumbling yields and high inflation cool offshore demand for the east African nation's debt. Tight liquidity in Kenya and Uganda is likely to keep their currencies steady against the dollar.
UGANDA: The Ugandan shilling is expected to weaken against the dollar over the next week, weighed down by reduced offshore interest in Uganda's debt as yields tumble. The currency of east Africa's third largest economy has been under pressure this month after the central bank carried on with its pursuit of an easing cycle, lowering foreign investor appetite for its debt. Commercial banks quoted the shilling at 2,513/2,523, weaker than last Thursday's close of 2,485/2,495.
KENYA: Kenya's shilling is expected to hold steady against the dollar in the days ahead, supported by tight liquidity in the interbank market. Traders said high interbank rates had put a funding constraint on banks ahead of a meeting of the central bank's rate-setting committee scheduled for April 4. The shilling was posted at 82.95/83.15 per dollar, slightly firmer than its 83.05/25 close last Thursday.
TANZANIA: The Tanzanian shilling is expected to hold steady against the dollar in the days ahead and could firm slightly due to a liquidity squeeze and a slowdown in demand for dollars. Commercial banks quoted the shilling at 1,591/1,596 to the dollar on Thursday, barely moved from 1,588/1,598 a week ago. Traders said the local currency could trade in the 1,580-1,590 range in the days ahead.
NIGERIA: The Nigerian naira is seen rangebound next week with a possible gain due to dollar sales by state-owned energy firm NNPC, but strong demand for the greenback may tighten up liquidity later in the week. Traders said the naira was flat on Thursday at 157.90 to the dollar as the market awaits the NNPC dollar inflow. "We (are) expecting that the NNPC will sell dollars before the end of the week, which will provide some support for the naira, but this may not last as demand remains strong in the market," one dealer said.
GHANA: Ghana's cedi is expected to remain steady against the dollar next week on enhanced central bank support amid easing demand for the greenback during the Easter period, traders said. The dollar-cedi rate is currently holding steady after touching fresh highs last week, crossing the 1.78 resistance barrier. The cedi was quoted at 1.7715/40 after opening at 1.7770/95. Tony Bennin, chief trader at Fidelity Bank Ghana, said recent central bank interventions, especially in the last week, had impacted the market significantly in favour of the cedi.