KAMPALA: The Ugandan shilling was steady on Friday, supported by demand from companies needing local currency to meet mid-month tax bills.
At 1042 GMT, commercial banks quoted the shilling at 2,889/99, little changed from Thursday's close of 2,890/2,900 to the dollar.
The shilling has been under pressure this year, losing 4.1 percent of its value and prompting the central bank to intervene twice this month to sell dollars. Traders have largely blamed the dollar's global appreciation as well weak dollar inflows.
But on Friday, "mid-month tax payments by corporates have ... sapped demand" for dollars, said David Bagambe, trader at Diamond Trust Bank, predicting the currency would hover around 2,900 next week.
"There's (shilling) liquidity tightness in the market, it's what has absorbed some of the (dollar) demand pressure," said Ali Abbas, trader at Crane Bank.
He said overnight interbank rates were at 11-12 percent compared with 7-8 percent when the market is sufficiently liquid.
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