KAMPALA: The Ugandan shilling held broadly steady on Monday after payment of taxes by firms cut demand for dollars.
At 1225 GMT, commercial banks quoted the shilling at 2,598/2,608, a fraction weaker than Friday's close.
"Demand is very low...corporates are using up their shillings for full-year tax payments which are considerably huge," said David Bagambe, trader at Diamond Trust Bank.
The east African nation's fiscal year ends on June 30.
Bagambe said the shilling was likely to trade in the 2,575-2,625 band this week with the central bank expected to remain vigilant over the levels of liquidity.
One currency trader said the central bank, which mopped up an unspecified amount of money during the session through a repurchase agreement (repo), could be supportive of the shilling.
Tighter liquidity in money markets usually makes it slightly more expensive for banks to fund long dollar positions.
"Frequent mop-ups will counteract any depreciation risks that may emanate from, say, speculative moves," he said.
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