Weak corporate demand for dollars boosts Uganda shilling

KAMPALA Mon Jan 13, 2014 6:55am EST

Related Topics

KAMPALA Jan 13 (Reuters) - The Ugandan shilling strengthened on Monday because of sagging corporate demand for dollars and efforts by the central bank to mop up excess liquidity in the local currency.

But traders said the shilling's outlook remained weak because of the conflict in neighbouring South Sudan that has hurt a lucrative export market.

At 0944 GMT, commercial banks quoted the currency of east Africa's third-largest economy at 2,510/2,515, stronger than Friday's close of 2,517/2,522.

"Because of very slow corporate demand we have had some (dollar) selling pressure in the interbank which has given the shilling appreciation momentum," said Shahzad Kamaluddin, trader at Crane Bank. "But also Bank of Uganda (the central bank) has been removing excess liquidity from the market."

He said the central bank offered a repo on Monday but it had not yet disclosed how much it drew out of the market.

On Friday the central bank offered a repo at 11.5 percent worth 143 billion Ugandan shillings.

"The shilling's strength is also partly reflecting the weakening of the dollar against major currencies," said a trader at a leading commercial bank. "But I expect it to be short-lived."

However, traders said some of the pressure would likely be offset by this month's central bank decision to hold its benchmark lending rate at 11.5 percent.

UGX Spot Rate.....

Ugandan Shilling Money Guide....

Calculated Cross Rates..........

Deposits.....................

Deposits & Forwards.............

Uganda Equities Guide.......

Uganda All Share Index........

Shilling background .....

Ugandan Debt Guide............

All Uganda Bonds.............

Uganda T-Bills..............

Uganda Benchmark.............

Central Bank ................

Ugandan Contributor Index....

Uganda Coffee Prices....... (Reporting by Elias Biryabarema; Editing by Edmund Blair/Ruth Pitchford)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.