KAMPALA: The Ugandan shilling was slightly weaker on Tuesday due to dollar demand from energy and manufacturing sectors but traders said a debt auction could attract hard currency inflows and reverse the losses.
At 1109 GMT commercial banks quoted the shilling at 2860/2870, slightly weaker than Monday's close of 2,858/2,868. "Some demand pressure was exerted by energy and manufacturing sector players," said Faisal Bukenya, head of market making at Barclays Bank.
"Since we have an auction this week we'll be looking to see whether it attracts offshore people which could reverse the losses." The central bank or Bank of Uganda plans to sell a total of 175 billion shillings ($61 million) worth of Treasury bills of all maturities on Wednesday.
Yields on Ugandan debt have been climbing in recent weeks, prompting surging optimism about a possible rise in offshore demand which could boost greenback inflows. Rates on Ugandan debt instruments have been climbing in recent months on worries government spending will likely escalate ahead of general elections due early next year.
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