KAMPALA: The Ugandan shilling extended losses for a third straight day on Wednesday, pressured by commercial banks' appetite for dollars.
At 1115 GMT commercial banks quoted the shilling at 2,607/2,617, weaker than Tuesday's close of 2,600/2,610.
"Demand pressure has come in from some commercial banks who were short," said Faisal Bukenya, head of market making at Barclays Bank.
Ahmed Kalule, trader at Bank of Africa, said recent demand by corporates had left most commercial banks short, spurring their own appetite to shore up their positions.
Bukenya said the shilling was expected to recoup those losses on the back of inflows from charities whose need to convert dollars from overseas into shillings usually increases at end of the month.
The shilling has lost 3.3 percent against the greenback in the year to date.
Traders say major moves for the local currency are unlikely ahead of release of August inflation data due on Friday as the market is keen to see whether the downward consumer price trend would hold.
In the medium-term, the shilling is seen supported by an uptick in rates on government debt and warming relations between Uganda and western donors after an unpopular anti-gay law was struck down by court.
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