Monday, 14 September 2015 17:20
KAMPALA: The Ugandan shilling was flat on Monday but market players were on alert for any signs of depreciation pressure after the central bank resumed its dollar purchasing programme.
At 0914 GMT, commercial banks quoted the shilling at 3,660/3,670 to the US dollar, unchanged from Friday’s close.
“We have the central bank back in the market today that will be a main factor players have their eyes on,” said Faisal Bukenya, head of market making at Barclays Bank.
“If they (central bank) get aggressive in their purchases, we might see some weakening pressure building.” The Bank of Uganda (BoU) usually buys about $ 5 million daily from the interbank foreign exchange market for reserve build up but had been absent for nearly two weeks.
Traders said it returned to the market on Monday and bought $ 2 million.
The shilling has lost 24.4 percent of its value against the greenback this year but has been stable the last few weeks after an aggressive hike of the monetary policy rate by the central bank.
BoU raised its Central Bank Rate (CBR) to 16 percent in August from the previous 14.5 percent, the fourth hike this year aimed at cooling latent inflationary pressures.
