Uganda's shilling strengthens versus dollar

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KAMPALA – The Ugandan shilling gained against the dollar on Wednesday, recouping some of its losses over recent days after twin bombings killed 76 soccer fans on Sunday.

At 0730 GMT, commercial banks in Kampala posted the local currency at 2,260/2,265 higher than the 2,273/2,278 at Tuesday’s close.

“We have seen the shilling strengthening mainly due to the movement in cross-currencies. Overall the dollar has weakened against the pound and the euro and this has given some support to the shilling,” said Lucas Ochieng, head of treasury at Orient bank.

Ochieng said the local currency was also helped by subdued corporate demand for dollars.

“There is very little demand for dollars from corporate clients. Some market players also took long dollar positions in anticipation of offshore clients exiting the government securities markets,” Ochieng said. He forecast the shilling would trade within the 2,260-2,275 range in the days ahead.

The central bank will today auction 80 billion shillings worth of Treasury Bills.

Deputy central bank Governor Louis Kasekende told Reuters the Bank of Uganda was ready to intervene if needed to ensure its markets remained stable after Somali Islamists detonated bombs in the capital Kampala.

“Market sentiment points towards a volatile market today. The unit could trade within a wide range of 2,260/2,280,”said Stanbic Bank Uganda in a market report.