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Ugandan shilling under pressure as telecoms firms seek dollars
July 8, 2014 / 10:36 AM / 3 years ago

Ugandan shilling under pressure as telecoms firms seek dollars

By Elias Biryabarema
    KAMPALA, July 8 (Reuters) - The Ugandan shilling 
weakened on Tuesday, weighed down by demand for dollars from
telecoms firms after the central bank  intervened to support the
currency a day earlier.
    At 1001 GMT commercial banks quoted the currency at
2,642/2,651, weaker than Monday's close of 2,635/2,645.   
    "The shilling is continuing to lose value because the market
is heavy on demand mainly from telecom firms," said Ahmed
Kalule, trader at Bank of Africa, adding this had prompted some
investors to cover short dollar positions.
    Another trader said telecoms firms were seeking dollars to
meet dividend payments.
    On Monday Bank of Uganda (BoU) sold an unspecified amount of
dollars to stem a recent decline fuelled by a recovery in
importer demand, aid cuts and slowing yields on government debt.
    Some western donors have cut or withheld aid over Uganda's
introduction of a tough anti-gay law. The currency is 4.5
percent weaker against the greenback in the year to date. 
    "The shilling would have lost a lot more but a liquidity
squeeze is slowing the depreciation," said Robert Mpuuga, trader
at Housing Finance Bank, noting that the central bank had been
frequently mopping up excess liquidity.
    He said the currency was finding support at about 2,650.
    BoU offered repos on Tuesday worth 93.5 billion shillings
($35.99 million).
    Mpuuga said the market was eyeing a Treasury bill auction on
Wednesday with another decline in yields likely to put more
pressure on the shilling. Bills worth 135 billion shillings of
all maturities will be for sale.
    
   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....... 
($1 = 2598.0000 ugandan shillings)

 (Reporting by Elias Biryabarema; Editing by Edmund Blair and
Andrew Roche)

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