KAMPALA - The Ugandan shilling weakened on Friday, as commercial banks bought dollars a day after the local currency rallied on the back of foreign appetite for government Treasury bills.
Commercial banks quoted the currency of east Africa's third-largest economy at 2,515/2,520 to the dollar, off an intraday high of 2,505/2,510. It had gained nearly 1 per cent on Thursday, closing at 2,510/2,515.
"The shilling rallied briefly in the morning before it came under a lot of pressure from banks," said Faisal Bukenya, head of market making at Barclays Bank.
Strong demand from foreign investors for 140 billion shillings ($55.7 million) worth of Treasury bills sold on Thursday had helped the currency firm towards the 2,500 support level.
Traders said the shilling could remain under pressure next week as demand for greenbacks from importers picks up.
"The market outlook suggests a mild rebound in terms of demand from the importers as placement of orders ahead of the holiday season come on board," said Stephen Kaboyo, managing director at Alpha Capital Partners.