African currencies outlook

Rising domestic interest rates are likely to attract investors to Kenyan and Ugandan debt next week, providing support to the two currencies after a string of record lows triggered by soaring inflation.
KENYA Steadily rising interest rates are likely to underpin Kenya's shilling next week, helping the currency of east Africa's biggest economy continue its rebound from a string of record lows against the dollar. Kenyan markets were closed on Thursday, but the shilling closed at 99.95 to the dollar on Wednesday, firmer than its 104.00/20 level a week ago.
The central bank is due to auction 4 billion shillings ($40 million) of 91-day Treasury bills, whose yields edged higher to 14.997 in the last auction, and 3 billion shillings of 182-day bills, whose yield rose to 14.973 percent.
UGANDA Uganda's shilling is likely to firm marginally against the dollar, supported by slowing corporate dollar demand and a rise in foreign investor flows into local government securities. Commercial banks quoted the shilling at 2,837/2,847, stronger than last Thursday's close of 2,845/2,855.
"The bulk of the corporate demand for dollars in our market originates from Kenya which is our biggest trading partner but demand there has been muted lately," said Ahmed Kalule, a treasury sales dealer at Bank of Africa Uganda.
TANZANIA Tanzania's shilling is seen strengthening marginally from Thursday's record low of 1,715/25 against the dollar in anticipation of central bank measures to support the currency. Traders said they expected the shilling to trade in a tight 1,710-1,720 range in the coming days.
NIGERIA The naira looks set for another unstable week, with the interbank market continuing to be hobbled by a recent central bank curb on banks' ability to hold dollar reserves. "The outlook depends on dollar inflows from energy companies next week, which could provide some support for the naira. Otherwise the naira will continue to trade at a wide margin to the official rate," one dealer said.
ZAMBIA The kwacha is likely to firm as companies sell dollars in order to pay workers' salaries due at the end of the month. Zambia's currency has traded in a 4,600 to 4,840 band for much of the last 12 months, although in the run-up to the September 20 election it fell to a 14-month low beyond 5,000 - a level that has tended to trigger central bank support.
GHANA The cedi is expected to recover further from last week's all-time lows providing the central bank keeps up the supply of dollars to underpin the currency. The unit hit a record low of 1.639.