African currencies outlook

Foreign demand for high-yielding debt in Kenya and Uganda is likely to underpin their respective currencies next week, while Nigeria's naira should benefit from hefty dollar sales in the past two days by oil companies.
UGANDA: Foreign investor appetite for Ugandan debt is likely to support Uganda's shilling next week, although Wednesday's single percentage point cut to the central bank's policy rate is expected to curb any gains against the dollar.
The shilling is up more than 7 percent against the dollar so far this year, driven partly by offshore demand in Uganda's fixed income market. Investors on Wednesday offered bids worth almost 500 billion shillings for a 5-year Treasury bond, five times the amount offered.
However, traders said the Bank of Uganda's (BoU) move to cut its key lending rate to 22 percent in February from 23 percent would weigh on the currency. Commercial banks in Kampala quoted the unit at 2,310/2,320, stronger than 2,360/2,370 a week ago.
KENYA: Offshore interest in Kenyan fixed income and exporter dollar inflows are expected to offset importer demand for foreign exchange, keeping the shilling steady versus the greenback. The Central Bank of Kenya held its benchmark lending rate steady at 18 percent for the second straight month on Wednesday, in part to dampen credit growth. While the move was in line with expectations and made no impact on the shilling, the high interest rates at a time of easing inflation has started to fuel demand for Kenyan securities.
Kenya accepted more than three times the 3 billion shillings of one-year Treasury bills on offer at auction on Wednesday in a sale that registered a 392 percent subscription level. The currency has gained 1.4 percent against the dollar in past week, trading at 83.70/80 shortly before the market's close, from 84.80/85.00 last Thursday.
TANZANIA: Tanzania's shilling is seen weakening against the dollar, pressured by importer demand for greenbacks and improving domestic liquidity. Commercial banks in Dar es Salaam quoted the shilling at 1,590/1,600 to the dollar on Thursday, slightly stronger than 1,597/1,607 a week ago, although they said it was likely to trade in the 1,600-1,610 range in the days ahead. "The shilling might depreciate next week because we expect to see increased demand for dollars from the oil and trading sectors," said Hamisi Mwakibete, head of trading at Commercial Bank of Africa Tanzania.
NIGERIA: The naira is set to rally as energy companies continue to sell dollars to banks, boosting interbank supplies of foreign exchange. Two oil companies, Chevron and Addax, sold $38 million to some banks on Wednesday, and Mobil sold $50 million on Thursday, lifting dollar liquidity and support for the local currency. The naira firmed to 160.65 to the dollar on the interbank market on Thursday, from Wednesday's close of 161.15.
GHANA: The cedi is likely to remain stable against the dollar next week, supported by central bank intervention and the sale of dollars by mining firms, traders said.