Dollar demand pressures persist in Tuesday's session

Traders said the currency remained under persistent pressure, largely driven by robust corporate demand for dollars, while offshore investors were notably active in reducing positions in local bonds and reallocating funds into safe-haven assets.

On the supply side, dollar inflows remained limited and were insufficient to match the strong demand, keeping the soft shilling under pressure throughout the session, according to Absa market report.

Money market liquidity remained constrained during the session, keeping funding rates elevated at an average of 11.75%.

The central bank remained on the sidelines, with no intervention in the market. Bank of Uganda will conduct a treasury bill auction on Wednesday (October 21) with sh350b up on offer.