Buy-Import-Export Premium Grade UGANDA VANILLA BEANS                           Buy-Import-Export Un-Refined Raw SHEA BUTTER 

Uganda Shilling Slides against US Dollar 15-May-2012

The Ugandan shilling weakened as much as 1.1 percent against the dollar on Tuesday, pressured by dollar demand from the energy sector, but traders forecast the local currency would rebound on potential dollar inflows after a Treasury auction.

At 1043 GMT commercial banks quoted the currency of east Africa's third-largest economy at 2,480/2,490, weaker than Monday's close of 2,460/2,470.

"We're seeing an uptick in demand from energy companies while supplies are fairly tight," said Ahmed Kalule, a trader at Bank of Africa.

"That mismatch has put the shilling on a weaker footing but we expect a recovery after tomorrow's auction."

Bank of Uganda (BoU) is due to sell Treasury notes of all maturities on Wednesday worth 120 billion shillings ($48.64 million).

Traders expect a healthy offshore investor participation, spurred by relatively high yields.

BoU held its key lending rate at 21 percent this month for a second time, even though inflation slowed down in April.

Analysts say the move was in part motivated by a desire to keep Uganda's debt yields relatively high to woo foreign investors whose dollars are a key prop for the shilling.

At the last auction on May 2 the 91-day paper returned a weighted average yield of 18.0 percent, down from 18.1 percent at the previous auction.

The local currency which is down 0.6 percent against the dollar this year, plummeted to its 2012 low of 2,620 on March 6 after a surprise rate cut and a slump in yields.

"The market's sights are now on the auction," said Denis Mashanyu, a trader at Standard Chartered Bank in Nairobi.

"And if significant inflows come in we might see a recovery but the overall outlook for the shilling is stable."

Reuters
15-May-2012

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Africa Uganda Currency and Forex News .





Haven't yet found what you Want...?

If you haven't yet found what you were looking for or you need detailed information about the subject matter on this page

then...

feel free to ask our business travel consultants.



Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.