KAMPALA: The Ugandan shilling was unchanged against the dollar in quiet trading on Tuesday with market players sidelined ahead of the central bank April rate decision on Wednesday.
Bank of Uganda (BoU) is due to announce April's Central Bank Rate (CBR) on Wednesday, and the rate is generally expected to be held after year-on-year inflation surged in March.
A rise in both food and non-food prices pushed up Uganda's headline inflation in March to 4.0 percent from a revised 3.5 percent in February.
The BoU has held CBR at 12 percent for three consecutive months, wary that resuming last year's policy easing risked fuelling lingering price pressures.
At 0931 GMT commercial banks in Kampala quoted the currency at 2,590/2,600, unchanged from Thursday's close.
The market was closed on Friday and Monday due to Easter holidays.
"The inflation numbers would favour holding the CBR but the market is waiting to see how BoU actually acts to chart the next course," said Ahmed Kalule, trader at Bank of Africa.
"However, the positive sentiment in the market emanating from the successful conclusion of the Kenyan election might lend some little energy to the shilling."
Uhuru Kenyatta was confirmed on Saturday by Kenya's Supreme Court as having been a validly elected president. His rival, Prime Minister Raila Odinga had sought nullification of the March 4 poll saying it was marred by illigalities.
Kenya is Uganda's largest regional trading partner and gateway to the sea and any outbreak of instability in east Africa's biggest economy would hit the Ugandan economy as happened in 2007, when the main trade route was affected.
"I expect the shilling to trade rangebound between 2,580-2,610 this week although the performance will ultimately depend on the policy stance that Bank of Uganda adopts for April," said Peter Mboowa, trader at KCB Uganda.
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