NAIROBI, June 19 African currencies are likely
to hold up against the U.S. dollar next week as companies make
domestic tax payments, with only Ghana's struggling cedi seen
bucking the trend after touching fresh three-year lows on
Kenya's shilling is expected to stay supported after
Nairobi successfully launched its debut $2 billion Eurobond,
which a National Treasury official said attracted bids worth
Commercial banks quoted the shilling at 87.30/50 to the
greenback on Thursday, up from 87.80/90 a week ago.
"The shilling will strengthen, but it will be very gradual,
because there would be a lot of end-month importer demand also
picking up from next week," Andlip Nazir, a senior trader at I&M
Traders expected the central bank to intervene should the
shilling weaken past 88.20, while gains were seen capped at
The Ugandan shilling was seen trading in a stable
range as companies paid their taxes in the local currency,
keeping a lid on demand for dollars.
The shilling traded at 2,570/2,580 at 1050 GMT, weaker than
last Thursday's close at 2,555/2,565.
"I don't see the shilling breaking out of the 2,550-2,580
range in the short term," said Faisal Bukenya, head of market
making at Barclays Bank.
Traders expected the Tanzanian shilling to gain some
ground in the days ahead, helped by greenback sales by
corporates to meet quarter-end tax obligations.
Commercial banks quoted the shilling at 1,684/1,689 to the
dollar on Thursday, stronger than 1,685/1,695 a week ago.
"I think dollar demand will keep shrinking as we are
approaching the end of the quarter," said Hamisi Mwakibete, head
of trading at Commercial Bank of Africa Tanzania.
The kwacha is likely to firm after Zambia's central
bank tightened monetary policy, signalling its intention to prop
up a currency that recently plumbed all-time lows.
On Thursday, commercial banks quoted the kwacha at 6.1250
per dollar, up from 6.3000 seven days ago.
The Bank of Zambia on Monday raised the effective annual
lending rate to 28 percent from 21 percent, a move market
analysts said would attract foreign investors to government
securities, boosting the kwacha.
Traders expected Nigeria's naira to strengthen on the back
of dollar sales from some oil companies and possible direct
intervention by the central bank next week.
The currency closed at 160.90 to the dollar on the interbank
market on Thursday, up from 163.10 the previous day.
Ghana's cedi is expected to be the outlier among
regional currencies, weakening further as importer demand
continues to far outweigh dollar supply.
The local currency has slumped nearly 30 percent since
January and hit a three-year low of 3.0700/3.1000 on Thursday.
"We expect the current trend to continue in coming weeks
because there is still a huge demand for the dollar that,
neither commercial banks nor the central bank can meet," a local
"There is no liquidity so interbank trading is virtually
The Bank of Ghana last Friday reversed restrictions it had
imposed in February on foreign exchange transactions to try and
halt the cedi's slide, but which the IMF said would be
ineffective unless Accra resolved macro-economic imbalances.
The bank also said it would ask the government to direct
mining and oil firms to operate retention accounts in Ghana to
boost foreign exchange inflows.
(Reporting by Chris Mfula, Elias Biryabarema, George Obulutsa,
Fumbuka Ng'wanakilala, Oludare Mayowa and Kwasi Kpodo; Editing
by Stella Mapenzauswa and Mark Potter)