ads. Buy-Import-Export Premium Grade UGANDA VANILLA BEANS Buy-Import-Export Un-Refined Raw SHEA BUTTER
Uganda Shilling Firm after Central Bank Lending Rate is Held 3-May-2012
The Ugandan shilling rallied nearly one percent against the dollar on Thursday, a day after the central bank left its policy rate unchanged due to a bleak inflation outlook.
Policymakers left the Central Bank Rate (CBR) at 21 percent for this month, citing risks to inflation from surging food prices and uncertainty around future direction of oil prices.
At 0803 GMT commercial banks posted the shilling at 2,475/2,485, up from Wednesday's close of 2,480/2,490.
"The rate decision signaled BoU (Bank of Uganda) is very keen on keeping the shilling supported so that's weighing on positions players are taking," said Peter Mboowa, a trader at KCB Uganda.
Analysts say BoU's decision to hold its key lending rate for the second month in a row will keep yields on Ugandan debt relatively attractive for offshore investors.
Hard currency flows from foreigners investing in government securities are a key source of support for the local currency in an economy with a weak export base.
A trader at a leading commercial bank said the shilling was also being boosted by dollar conversions from offshore traders who participated in Wednesday's Treasury bill auction.
"I think there was a healthy level of (debt) uptake by offshore investors judging by the conversions we're seeing," he said.
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
feel free to ask our business travel consultants.