African currencies outlook

After a major rally in the last three days, Nigeria's naira may falter due to a shortage of dollars among domestic banks, while Zambia's kwacha is likely to gain slightly as foreign companies get ready to pay local taxes.
NIGERIA The naira weakened against the dollar on the interbank market on Thursday due to strong forex demand from banks and may ease further in the absence of expected dollar sales from state-owned energy company NNPC. The currency jumped 6 percent from a record low of 167.8 immediately before the central bank's move, but dealers said that rebound would falter unless the immediate dollar scarcity was brought to an end.
ZAMBIA The kwacha is expected to post modest gains due to an increase in dollar supply from companies selling foreign exchange in order to pay quarterly local taxes. The currency of Africa's top copper producer was at 4,940 to the dollar on Thursday, a shade firmer than 4,960 a week ago. "The rally in copper prices in recent days, coupled with the weakening of the dollar against major convertibles, could give some support to the kwacha," Cavmont Bank treasurer Mudenda Syamujaye said.
GHANA The cedi is hovering around record lows of 1.63 to the dollar, with its immediate future hanging on the amount of offshore interest in a 300 million cedi 3-year bond auction on Thursday. Standard Bank's Christopher Nettey quoted the cedi at 1.6305/30, a decline of more than 7 percent from July, when the currency of the West African cocoa producer started its slide.
KENYA Dollar demand from Kenya's energy and telecoms sectors are expected to keep the ailing shilling under pressure although traders expect some form of liquidity tightening from the central bank. East African central bank governors said on Wednesday they would work together on tightening monetary policy in a bid to stem exchange rate volatility and curb speculation.
Commercial banks quoted the shilling at 103.80/104.00 against the dollar, weaker than last Thursday's close of 102.30/60. Down 23 percent against the dollar this year, the shilling slumped to a record low of 107 on Tuesday amid heavy importer demand for greenbacks as a central bank initiative to sell foreign exchange directly to companies fell apart.
TANZANIA Tanzania's shilling hit another record low this week, at 1,712.48 to the dollar, and may well fall even further amid few signs of any decent dollar inflows. Traders said they expected the shilling to trade in the 1,700-1,710 range over the coming days.