KAMPALA: The Ugandan shilling was steady on Monday but traders said it was expected to lose ground in the course of the week as they buy dollars in anticipation of increased demand from importers.
At 1056 GMT commercial banks in Uganda quoted the currency of east Africa's third-largest economy at 2,587/2,597, unchanged from Friday's close.
"Going forward, we think once business has fully resumed after the traders' (shopkeepers') strike we'll see demand come in," said Brenda Akumu, trader at KCB Uganda.
"And we're seeing some traders are trying to build positions in anticipation the shilling will weaken."
Shopkeepers in the capital Kampala closed their shops at the beginning of last week to protest a new government regulation that all importers of goods subject them to pre-shipment inspections to stop the flow of sub-standard merchandise into the country.
On Friday, however, the government agreed with the traders to delay implementing the measures which prompted them to call off the strike.
Akumu said market participants were waiting to see if the central bank will take a cue from slowing inflation to further cut to its key lending rate this month before taking positions.
Bank of Uganda is due to announce its benchmark Central Bank Rate for July on Tuesday after statistics last week showed year-on-year headline inflation slowed in the year to June to 3.4 percent from 3.7 percent the previous month.
Scant hard currency inflows are also seen adding to the depreciation risk for the shilling this week.
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