KAMPALA: The Ugandan shilling lost ground against the dollar on Friday after the United States announced a host of punitive measures against Uganda the previous day over its harsh new anti-homosexuality legislation.
At 0902 GMT commercial banks quoted the shilling at 2,585/2,595, weaker from Thursday's close of 2,575/2,585.
On Thursday, Washington cancelled a regional military exercise in Uganda, imposed visa restrictions and diverted or cut aid to Uganda as further punishment for the passing of an anti-gay law in February. The law imposes harsh penalties for various acts of homosexuality including lengthy jail terms for some offences.
"Eventually these sanctions will affect foreign investment inflows," said David Bagambe, trader at Diamond Trust Bank.
"So no one is taking anything for granted we've seen a lot of interbank buying as players take positions in reaction to that news." He said the shilling, which is 2.5 percent down against the greenback this year, was now likely to weaken past the key psychological level of 2,600 next week.
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