The central bank plans to sell 100 billion shillings ($40 million) worth of two-year Treasury bonds on Wednesday and traders say minimal offshore investor interest is likely to bring in some dollar inflows and buoy the shilling.

At 0955 GMT commercial banks in Kampala quoted the shilling at 2,465/2,475, unchanged from Friday's close.

"The market is looking up to the auction ... it's possible we might get limited foreign interest since debt yields haven't fallen as sharply as was initially feared," said Peter Mboowa, trader at KCB Uganda.

"So the shilling might edge up slightly if we get inflows from that auction," he said.

At its last sale on May 24, the two-year paper returned a weighted average yield of 15.2 percent, down from 15.6 percent at the previous auction.

Yields on Ugandan debt have remained largely stable despite analyst fears they would plummet on the back of two straight months of monetary policy easing by the central bank.

A sharp decline in yields would potentially depress offshore uptake of Ugandan debt, a key source of hard currency that partly helps prop the shilling.

"The recent range of 2,460-80 is likely to hold for the shilling," said Leonard Ogenworth, trader at Housing Finance Bank, but added: "The bias is for a stronger shilling since we might get some (foreign currency) inflows from commodity exporters coming in against stagnant demand.