Shilling opens slightly weaker after Christmas

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The Uganda shilling traded slightly lower after Christmas as pockets of demand for dollars from manufacturers pushed the currency pair to briefly touch the day’s lows of 3625/3635.

Traders said the level that triggered selling interest from commodity exporters, banks, and inward dollar remittances during the session. The local unit opened the week at the 3605/3615 levels and closed at the 3610/3620.

“Offshore market players have kept on the sidelines amid a cautiously calm market. The shilling is still expected to trade within the range of 3575 – 3625 in the near term,” Richard Nsubuga, a market analyst, said.

Money markets were liquid according to the Absa market report, prompting the central bank to mop up the excess liquidity, up to sh178b. The interbank overnight and one-week rates averaged at 10.27% and 10.47%, respectively.