Shilling weakens slightly on dollar demand

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The Uganda shilling closed Wednesday’s trading session at 3455/3465, weakening slightly from its opening levels of 3445/3455.

The local currency traded stronger against the dollar during the morning session, briefly touching 3430/3440, as market activity was largely driven by portfolio flows. 

Traders said offshore investors were seen converting funds ahead of Thursday’s government bond auction settlement. These stronger levels attracted buying interest from local banks, alongside demand from the manufacturing and telecom sectors.

Money market liquidity remained tight, according to Absa report, with interbank overnight and one-week rates averaging 10.02% and 10.25%, respectively, as market players awaited results from the Treasury Bond auction.