Shilling to weaken further
Jul 10, 2013
The Ugandan shilling was little changed on Monday, but market players said it was set to weaken further in coming days, undermined by an expected pick-up in dollar demand from companies now that month-end tax payments have been met.
KAMPALA
The Ugandan shilling was little changed on Monday, but market players said it was set to weaken further in coming days, undermined by an expected pick-up in dollar demand from companies now that month-end tax payments have been met.
Emerging market currencies, including the shilling, have weakened since the US Federal Reserve signalled last month that it could roll back its stimulus programme. Robust US jobs data on Friday reinforced that prospect.
Commercial banks quoted the currency at 2,588/2,598, a notch weaker than Friday’s close of 2,585/2,595.
“We should see the shilling remaining in a weak position on the back of an anticipated rebound in (dollar) demand after recent end-month tax payments,” said Thaib Lubega, a trader at Stanbic Bank.
Companies had been converting dollars to local currency towards the end of last month to meet tax payments.
Reuters