Ugandan shilling stable for second day, eyes key rate decisions

The Ugandan shilling was stable for a second consecutive day on Tuesday, amid slow trading and expectations the local currency will remain rangebound.

At 1006 GMT commercial banks quoted the shilling at 3,310/3,320, unchanged from Monday’s close.

“(The shilling) will keep in the 3,310-3,325 range pending direction from BoU (Bank of Uganda) and Fed decisions,” said a trader at a leading commercial bank.

Uganda‘s central bank is due to announce its key rate decision this month while the U.S. Federal Reserve is expected to hike interest rates this month, a move seen as hitting assets in frontier markets.

A stanbic bank note said the shilling would be biased toward a stronger side “as sentiment for the Treasury bill auction this week starts feeding through.”

Offshore investor interest in Ugandan debt has been a key source of foreign exchange flows and support for the shilling in recent month.

A total of 175 billion shillings ($52.79 million)worth Treasury bills of 91-, 184-, and 364-day tenors are on offer this week.