Ugandan shilling flat, seen boosted liquidity mop up

KAMPALA Tue May 13, 2014 6:25am EDT

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KAMPALA May 13 (Reuters) - The Ugandan shilling was flat on Tuesday although traders said removal of excess liquidity from the market by the central bank was likely spur gains by the local currency.

At 0902 GMT, commercial banks quoted the currency of east Africa's third-largest economy at 2,520/2,525, unchanged from Monday.

Removal of excess shillings from the market alongside slow inflows from offshore investors and weak corporate hard currency purchases have kept the Ugandan shilling largely stable against the greenback in the year to date.

"Inflows are low but also we're not seeing much appetite from corporates... activity is very weak," said Ali Abbas, a trader at Crane Bank.

"Since BoU (Bank of Uganda) has done a large excess liquidity mop up it could push the shilling to 2,515 levels."

Abbas said Bank of Uganda or central bank removed a total of 452 billion shillings ($179.29 million) from the market via a seven-day repo taken at 11.5 percent.

The currency was unmoved by an International Monetary Fund report saying Uganda's economic growth would accelerate to just above 6 percent in the next fiscal year through June 2015.

Analysts say corporates' demand for dollars this week will be muted because they will be meeting mid-month tax payments.

A market note from KCB Uganda said they "expected the shilling to slightly appreciate today following a Treasury bill auction tomorrow."

Uganda is due to sell 120 billion shillings worth of Treasury bills of all maturities on Wednesday.

UGX Spot Rate.....

Ugandan Shilling Money Guide....

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Uganda Equities Guide.......

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

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Uganda Coffee Prices....... ($1 = 2521.0000 Ugandan shillings) (Editing by James Macharia and Susan Thomas)

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