African currency's outlook

Kenya's shilling is likely to stabilise next week after a dramatic slide to a lifetime low, although its Ugandan counterpart, also on the ropes, looks set to slump further into record territory, players say.
KENYA Kenya's shilling is expected to stabilise after hitting a record low on Tuesday as the effect of banks cutting long dollar positions is offset by an expected fall in tea and coffee export receipts. The shilling was trading at 85.60/70 against the dollar on Thursday, rebounding from Tuesday's record low of 86.70/80.
"Based on its recent moves, I see the shilling consolidating in a narrow range of 85.50-86.00," said Solomon Alubala, head of trading at Co-operative Bank. The shilling began its descent last month, due partly to concerns about the impact of higher global crude prices on the country's import bill and demand for dollars. It is now down about 6 percent against the dollar this year.
UGANDA Uganda's shilling is likely to fall further into record territory unless the central bank decides to use an oil windfall secured this month to sell dollars, traders said. It hit a record low of 2,420/2,435 against the dollar on Tuesday and could fall further if the central bank takes no action.
Commercial banks quoted the unit at 2,408/2,412 to the dollar versus last Thursday's close of 2,384/2,389. "Next week we're still looking at a fundamentally weak shilling on limited inflows," said Faisal Bukenya, head of market making at Barclays.
NIGERIA The naira is set to weaken further and may trade around 157 to the dollar with demand for the greenback from bureaux de change outlets remaining strong ahead of elections next month. It was trading at 156.90 early on Thursday - its lowest since August 2009 - from Wednesday's close of 156.65 as limited dollar inflows from energy companies put the squeeze on supply at the interbank market.
At the official window, demand for the dollar continued to outstrip supply, with the central bank selling $400 million at 151.11 against $473.5 million demanded. Dealers said the dollar demand from bureaux de change suggested rich Nigerians were buying foreign currency due to fears of political violence and economic disruption linked to general elections due next month.
ZAMBIA The kwacha is likely to remain under pressure because of the turmoil in the Middle East and North Africa that is keeping energy prices high. The currency of Africa's biggest copper producer slipped to 4,805 against the dollar versus 4,740 a week ago.
"We expect the kwacha to remain under pressure around 4,820 to 4,880. But if the existing situation escalates, it could even break the psychological level of 4,900," one trader said. The unit last traded at 4,900 in December.
GHANA The cedi is likely to continue to come under mild depreciation pressure as dollar demand from the oil and gas and manufacturing sectors and importers outstrips foreign inflows. The unit's depreciation over the last four sessions will be closely watched by the central bank, which appears keen to avoid a repeat of the cedi's 6 percent slump in January, said Jacob Brobbey from Barclays Ghana. The cedi was at 1.53 on Thursday at midday, 0.5 percent weaker than its level a week ago, and 2.9 percent down on the year.
TANZANIA Tanzania's shilling is expected to trade within a tight range. Commercial banks quoted the unit at 1,506/1,511 compared with 1,510/1,515 a week ago. "The shilling has been trading sideways. There are some speculators in the market and the 1,518 level is largely seen as the resistance point," said Eric Chijoriga, a dealer at National Bank of Commerce. Traders said they expected the shilling to trade in the 1,500-1,510 range in coming days.