African currencies week ahead: East African currencies seen weaker, kwacha to stay firm

East African currencies are expected to come under pressure next week as investors flee emerging markets, while the naira is likely to hold its ground on anticipated dollar sales by the central bank.
KENYA: Kenya's shilling is expected to stay under pressure next week with a flight by global investors from risky emerging market assets overshadowing domestic Kenyan issues. At 1149 GMT, the shilling was quoted at 103.70/103.80 to the dollar, from 103.45/55 to the dollar a week ago.
"All markets are correcting and I don't think the shilling has been left behind," said one Nairobi-based trader. "It's all dependent on what's happening in the global markets next week." Kenya's central bank intervened in the market on Tuesday by selling dollars. Traders say expectations of further central bank action were providing some support against adverse global market conditions.
UGANDA: The Ugandan shilling is expected to weaken, undermined by demand from importers for dollars. At 1006 GMT commercial banks quoted it at 3,570/3,580, slightly stronger than last Thursday's close of 3,575/3,585. "Going into next week I expect faster depreciation pressure because we'll likely see a rise in importer demand," a trader at a leading commercial bank said.
Importers will be buying hard currency, he added, to pay for raw material shipments to cover the next month. The shilling is already down 22.6 percent so far this year, and could heading towards the 3,600 region.
TANZANIA: The Tanzanian shilling is expected to slip against the dollar, undermined by demand from trading and oil companies. Commercial banks quoted the shilling at 2,145/2,155 to the dollar on Thursday, weaker than 2,125/2,135 a week ago. "What we see is that the shilling will likely depreciate against the US dollar next week due to demand from oil importers and trading companies," said Sameer Remtulla, a dealer at Commercial Bank of Africa Tanzania.
NIGERIA: The naira is seen sustaining its stability against the greenback next week on both the parallel and interbank markets in anticipation of dollar sales by the central bank to bureau de change operators and the interbank market.
"We expect the naira to remain unchanged at this level (210-211 a dollar) for as along as the central bank continues to inject dollars into the market," said Harrison Owoh, a bureau de change operator. The central bank has sold dollars to bureau de change operators twice a week since the start August in a bid to increase greenback liquidity and support the local currency.
The naira was quoted at 211 to the dollar by many parallel operators in Lagos on Thursday, slightly weaker than 210 last week, while the currency is trading at 199.50 to the dollar on the interbank market, but was seen reaching the 197 peg set by the central bank in February later in the day.
GHANA: Ghana's cedi is seen holding steady on interbank dollar sell-offs in anticipation of central bank greenback sales beginning next week, traders said. The central bank has signalled it will resume its vigorous interbank dollar sales in September to shore up the local unit, currently down 30 percent since January.
GHS traded at 4.1100 at 1120 GMT on Thursday, compared to 4.1800 last Thursday. "We are beginning to see some stability due to (dollar) sell-off by investors and their banks in order to take advantage of the current attractive exchange rate before the central bank comes in," Joseph Biggles Amponsah, analyst at Dortis Research, said.
ZAMBIA: The kwacha is expected to recover some of its recent losses next week after China, a major importer of Zambia's copper, moved to support its economy by easing monetary policy. At 1012 GMT on Thursday, commercial banks quoted the currency of Africa's No 2 copper producer at 8.4500 per dollar, weaker than 8.1700 a week ago. "Kwacha losses could be easing as it grinds out modest gains. Global markets are beginning to shed their losses," the local unit of South Africa's First National Bank (FNB) said in a note on Thursday. The kwacha would also be boosted by dollar conversions to meet month-end obligations payable in the local currency, Zambia National Commercial Bank said in a separate note.