KAMPALA (Reuters) – The Ugandan shilling was stable on Wednesday as a recent panic purchase of dollars by commercial banks subsided after a central bank intervention on the sell side earlier in the week and subdued demand among corporate clients.
At 1002 GMT commercial banks quoted the shilling at 3,400/3,410, little changed from Tuesday’s close of 3,405/3,415.
(Reporting by Elias Biryabarema; Editing by George Obulutsa)
KAMPALA (Reuters) – Uganda’s shilling extended losses on Wednesday as banks sought to cover short dollar positions amid uncertainty before next month’s presidential election and traders also cited an excess in local currency liquidity.
By 0948 GMT, commercial banks quoted the shilling at 3,475/3,485, compared with Tuesday’s close of 3,450/3,460. The shilling has lost nearly 3 percent of its value against the dollar so far this year.
“There’s general uncertainty being generated by the coming election so there’s a lot of speculation-driven demand by banks to cover short positions,” said Shahzad Kamaluddin, a trader at Crane Bank. He also noted a lot of shilling liquidity.
The presidential election is due on Feb. 18, and some analysts are concerned about possible vote-related violence.
(Reporting by Elias Biryabarema; Editing by Edmund Blair)
KAMPALA (Reuters) – The Ugandan shilling was slightly firmer on Monday due to subdued dollar demand and tight liquidity in the money markets, traders said.
At 0905 GMT, commercial banks quoted the shilling at 3,668/3,678, stronger than Thursday’s close of 3,675/3,685. Markets were closed on Friday for a national holiday.
“Some players in the interbank are cutting back their (dollar) positions because there’s no demand,” said Ali Abbas, trader at Crane Bank.
“I have also seen some banks doing conversions to get shillings because there’s a bit of (shilling) scarcity.”
The local currency has lost 25 percent against the greenback so far this year and its steep depreciation has prompted the central bank to increase its key lending rate to try provide support and stem price pressures.
The rate now stands at 16 percent after being raised by a total of 500 basis points so far this year.
The central bank is due to make its next announcement on the rate on Thursday and most analysts expect a hike to help curb surging inflationary pressures.
Uganda’s inflation shot up to 7.2 percent year-on-year in September from 4.8 percent in August.
Bank of Africa said in a market note it expected some demand from energy companies, which could give the shilling some depreciation bias, though it will likely remain below 3,700.
(Reporting by Elias Biryabarema; Editing by George Obulutsa and Tom Heneghan, Reuters)
