Ugandan shilling stable on slowing importer activity

The Ugandan shilling was flat on Monday with weaker import activity hurting dollar demand and supporting the local currency.

At 0912 GMT commercial banks quoted the shilling at 3,315/3,325, unchanged from Friday’s close.

“Importers have already covered all their hard currency needs. I think they will be out (of the market) for the next two to three weeks,” said Faisal Bukenya, head of market making at Barclays Bank.

Bukenya said the market was receiving some limited inflows from non-governmental organisations (NGOs).

“The overall tone for the shilling will be tending toward strengthening in the coming days,” Bukenya said.

A combination of sluggish corporate demand and healthy inflows from commodity exporters, charities and Uganda‘s emigrant workers has given the shilling a broadly firming tone in recent weeks.

However, the currency is still 16.5 percent weaker against the greenback so far this year.

A trader from a leading commercial bank said a Treasury bill auction this week was likely to draw offshore interest and boost inflows of hard currency.