KAMPALA: The Ugandan shilling was steady on Friday in quiet trading, but was expected to weaken in the coming days due to dollar demand from importers, traders said.
At 0923 GMT commercial banks quoted the shilling at 2,700/2,710, unchanged from Thursday's close. "I think the outlook points to further weakening a lot of demand is still anticipated from importers," said Faisal Bukenya, head of market making at Barclays Bank.
The shilling had lost ground to the dollar earlier this week, pressured by a strong appetite for hard currency from manufacturing and energy firms weighing against scarce inflows. Lack of any Treasury bill auctions this week had also weakened the local currency, traders said.
The debt auctions attract inflows because offshore investors who participate have to convert their hard currency holdings to pay for their bids.
In the year to date, the local currency is so far 6.7 percent weaker against the greenback.
In a market note, Stephen Kaboyo of Alpha Capital Partners said the shilling was poised to touch further lows next week.
"Going forward, the reality is that currency headwinds are unlikely to turn into currency tailwinds soon," he said.
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