Tuesday, 31 March 2015 20:29
KAMPALA: The Ugandan shilling was stable on Tuesday but was expected to weaken after the central bank pumped local currency into the interbank market through a reverse repo.
At 1141 GMT commercial banks quoted the shilling at 2,970/2,980, unchanged from Monday’s close.
“Am expecting some players will be taking positions with improved liquidity conditions,” said Ahmed Kalule, trader at Bank of Africa. “We could see a marginally weaker unit (shilling) going forward.”
Kalule said the central, Bank of Uganda, had pumped shillings into the interbank via a seven-day reverse repo although it was not yet clear how much had been injected.
The shilling has been largely bearish over the last three months, in part undermined by strong corporate demand and a globally strong greenback.
An aggressive sell-off of dollars earlier this month by the central bank helped cool some of the pressure although most traders expect the local currency’s outlook to remain bearish.
The shilling is down 6.7 percent against the dollar so far this year.
Faisal Bukenya, head of market making at Barclays Bank said corporate demand was largely subdued and that the shilling would likely play in the 2,960-2,990 range.
Copyright Reuters, 2015
