Tight liquidity helps Uganda shilling recover early losses

KAMPALA, March 19 Wed Mar 19, 2014 6:03am EDT

Related Topics

KAMPALA, March 19 (Reuters) - The Ugandan shilling recouped early losses on Wednesday, and traders said strong foreign participation in a government debt sale could extend its gains.

At 0955 GMT, commercial banks quoted the currency at 2,527/2,535, off its low of 2,535/2,545 in early trading and matching Tuesday's close of 2,528/2,538.

Commercial banks sought U.S. dollars early in the session, before they pay dividends for the 2013 financial year to foreign shareholders, said Housing Finance Bank trader Robert Mpuuga.

"However, there's also a shortage of shillings in the market and the unit could only weaken so much before it eventually rebounded," Mpuuga said.

The shilling has held its ground against the U.S. currency so far this year. But it has needed help from the central bank, which has consistently mopped up liquidity and last month pumped dollars into the market, after some aid was suspended because of new anti-gay legislation, rattling investors.

Currency traders said they were watching the results of Wednesday's sale of Treasury bills worth a total of 165 billion shillings.

"If the auction draws good dollar amounts, the shilling will probably extend gains, but that will be clear after the results come through," said a second trader at a leading commercial bank.

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 Richard Lough, Larry King)

FILED UNDER: