KAMPALA: The Ugandan shilling gained on Monday as slackening corporate demand spurred a sell-off in the interbank market.
At 0926 GMT, commercial banks quoted the shilling at 2,745/2,755 per dollar, stronger than Friday's close of 2,750/2,760.
"Demand from corporates has dropped significantly and has touched off some (dollar) sell-off pressure," said Shahzad Kamaluddin, trader at Crane Bank.
"That's lifting the shilling."
The central bank of Uganda has moved aggressively in recent days to mop up excess money market liquidity and so limit downwards pressure on the local currency, and Kamaluddin said another such operation on Monday was also helping the shilling.
The size of the operation was not immediately clear.
The shilling is 8.2 percent weaker against the dollar this year and some traders expect it to slip more in coming days as foreign-owned firms preparing to report their 2014 earnings to their parent companies stock up on hard currency.
A trader at a leading commercial bank said the shilling was likely to stay in a range of 2,720-2,750 per dollar ahead of Friday's release of November inflation data.
Uganda's year-on-year headline inflation last month edged up to 1.8 percent from 1.4 percent in September, pushed up by a surge in non-food prices.
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