Thursday session sees sharp swings in Uganda shilling

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The Uganda shilling strengthened on Thursday, with the dollar-shilling pair closing at 3,610 / 3,620 after a volatile session.

Early trading saw strong dollar demand from local banks, offshore investors, telecoms, and energy firms, which pushed the rate up to 3,660 / 3,670.

Traders said the afternoon brought renewed supply from commodity exporters hedging at favourable levels, prompting a correction that helped the shilling recover.

The currency ended the day about 15 shillings stronger than its opening level of 3,625 / 3,635.

In the regional market, the Kenyan shilling held steady against the dollar, closing at 129.15 / 129.35.

Liquidity remained tight, with interbank overnight and one-week rates averaging 9.73% and 10.08%, respectively, according to Absa market data.

The Bank of Uganda conducted an open market operation, withdrawing sh509.6b through a seven-day repo and the issuance of central bank bills.