KAMPALA: The Ugandan shilling held steady against the dollar on Monday and traders said they were expecting liquidity to improve as the government settles its bills ahead of the close of the fiscal year, putting the currency under pressure.
At 0931 GMT, commercial banks quoted the currency of east Africa's third largest economy at 2,530/2,540, unchanged from Friday's close.
Uganda's fiscal year runs from July to June.
"What happens towards the end of the fiscal year is that we see a surge in liquidity as government clears up arrears," said David Bagambe, a trader at Diamond Trust Bank. "I expect it to put some pressure on the shilling."
The shilling had edged down 0.4 percent against the dollar in the year to date, reflecting the central bank's regular support, and lower demand for dollars from importers due to a sluggish economy.
Last month, the central bank revised down the growth forecast for Uganda's economy in 2013/14 down to 5.7 percent, from an earlier projection of 2015.
Comments
Comments are closed.