KAMPALA: The Ugandan shilling strengthened slightly on Monday, buoyed by slackening dollar demand and inflows of hard currency from non-governmental organisations.
At 1005 GMT commercial banks quoted the shilling at 2,965/2,975, stronger than Friday's close of 2,970/2,980.
Local NGOs normally get their revenues in hard currency from foreign donors and have to convert them to shillings to meet most of their operational expenses.
"Some NGOs (non-governmental organisations) have been selling, they normally need shillings around this time to pay salaries," said Isaac Iga, chief dealer at Orient Bank.
"However demand from corporates is generally subdued and it's helping give the shilling energy."
The shilling has lost 6.6 percent to the dollar so far this year, having come under pressure in the last three months from a globally strong dollar and a surge in demand for the U.S. currency from foreign-owned paying dividends abroad.
The central bank, Bank of Uganda (BoU), has sold dollars into the market to support the local currency although traders say the shilling's medium-term outlook is still bearish.
Iga said the shilling would this week likely trade between 2,950-3,000 against the dollar.
A trader at a leading commercial bank said demand during the week would likely remain flat with the tempo of business activity tailing off as the weekend draws close, with most banks and businesses closed on Friday and Monday for public holidays.
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