KAMPALA: The Ugandan shilling strengthened on Wednesday, helped by dollar inflows from non-governmental organisations and expectations foreign investors will participate in a Treasury bill auction.
At 0914 GMT, commercial banks quoted the shilling at 2,700/2,710, from Tuesday's close of 2,705/2,715.
"The market has received substantial inflows from NGOs that we normally get at the end of the month," said Faisal Bukenya, head of market making at Barclays Bank.
Charities typically convert hard currency at the end of the month to meet their operational expenses.
Increased dollar demand from importers last week weakened the shilling, pushing it to trade at 2,710, where it last traded in January 2013.
Although it has recovered some, market players expect the shilling to stay under pressure from demand for dollars among importers, which was expected to remain strong in November and early December.
Shahzad Kamaluddin, a trader at Crane Bank, said the slowdown in importer demand on Wednesday had also helped the shilling.
"Some players are hoping the auction will bring in flows ... that's also boosting confidence for the shilling," he said.
The central Bank of Uganda is auctioning Treasury bills on Wednesday worth a total 145 billion shillings ($53.70 million).
Comments
Comments are closed for this article.