Shilling weaken slightly in Tuesday's session

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The Uganda Shilling depreciated against the US Dollar during Tuesday’s trading session, briefly reaching 3470/3480 before recovering to close at 3445/3455, compared to an opening level of 3425/3435.

Traders said the initial weakening was largely driven by strong demand from offshore market participants, which prompted commercial banks to enter the market in anticipation of further upward movement. 

However, the elevated afternoon levels attracted selling interest, according to Absa market report, allowing the local unit to regain some ground as sentiment shifted.

Money markets remained relatively liquid, with the interbank overnight and one-week rates averaging 9.87% and 10.13%, respectively. In the debt market, the Bank of Uganda has not scheduled any securities auction for this week.