KAMPALA: The Ugandan shilling weakened for a second day on Tuesday, weighed down by demand for dollars from commercial banks looking to square their positions as they prepare to close their books for this year.
At 0909 GMT commercial banks quoted the shilling at 2,775/2,785, weaker than Monday's close of 2,770/2,780.
"Many of the banks are buying because they need to square their positions before they close the year," said Shahzad Kamaluddin, a trader at Crane Bank.
"Globally the dollar is also bullish and that's also echoing on the shilling...everyone wants to rush to the safe haven."
Kamaluddin said the local currency's depreciation was being slowed by the central bank's liquidity mop-up on Monday which he said took out about 228 billion shillings ($82.16 million).
The local currency is 9.2 percent weaker against the greenback so far this year. Much of the weakening occurred in the second half of the year, fuelled in large measure by demand from importers.
A trader from a leading commercial bank said the shilling would likely oscillate in the 2,760-2,790 range in the short term amidst subdued corporate demand as most firms are still closed for the Christmas and year-end holidays.
Comments
Comments are closed.