KAMPALA: The Ugandan shilling was flat on Friday but was expected to weaken next week on the back of anticipated dollar demand by companies and low hard currency inflows.
At 0919 GMT commercial banks quoted the shilling at 2,775/2,785, unchanged from Friday's close.
"I think there's still outstanding demand pressure from corporates," said Benon Okwenje, trader at Stanbic Bank. He didn't mention specific sectors but much of the appetite for the US dollar that pressured the local currency this week came from importers and commercial banks. The local currency is now 9.2 percent weaker against the greenback so far this year.
Some traders said the shilling will likely trade below the 2,800-level to the dollar for the rest of the year.
Traders said the local currency has weakened steadily over the past few weeks largely on the back of importer demand for dollars, and the global strength of the greenback.
The central bank of Uganda has mopped up excess money market liquidity in recent days, making it relatively costlier to hold onto long dollar positions and helps strengthen the shilling, but traders said it may have to sell dollars to prop up the shilling next week if the expected dollar demand comes through.
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