Uganda shilling dips against US dollar

Monday, 29th August, 2011

The Uganda shilling was weighed down on Friday by dollar demand notably from oil importers and manufacturers, and traders said it was likely to shed more value next week, albeit moderately.

Commercial banks in Kampala quoted the local currency at 2,820/2,830 against the dollar, slightly weaker than Thursday’s close of 2,815/2,820.

“Dollar demand is from varied sources but much of it stems from the oil and manufacturing sectors,” said Lucas Ocheing, the head of Treasury at Orient Bank.

He said markets were eyeing 2,800 and 2,840 as the shilling’s resistance and support levels respectively.

Stanbic Bank Uganda said in a market report the shilling was expected to trade in a range of 2,730/2,830 on Friday.

A trader with a leading commercial bank said the shilling’s slide was being slowed by continuing tight liquidity.
“Market players don’t have a lot of shillings to buy large amounts of dollars otherwise I think the depreciation would have been steeper,” he said.

Reuters