KAMPALA: The Ugandan shilling weakened slightly on Tuesday, undermined by dollar demand from the energy sector but it was expected to hold largely stable in the days ahead.
At 0922 GMT commercial banks quoted the shilling at 2,858/2,868, compared with Monday's close of 2,855/2,865.
"Today's weakening was driven by some demand that we saw from energy sector players," said Faisal Bukenya, head of market making at Barclays Bank Uganda.
Bukenya said the shilling's weakening was expected to be capped at 2,870 before central bank announces its benchmark Central Bank Rate (CBR) for the next two months by mid-February.
Traders are keen to see if the bank will cut its benchmark lending rate in an environment of a weak local currency, low inflation and rising costs of government borrowing.
At its last meeting in December, the bank left the rate unchanged at 11 percent.
The shilling is now 3.1 percent weaker against the greenback so far this year.
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