The Ugandan shilling clawed its way back from an all-time low against the dollar on Friday after the central bank stepped to defend the local currency, traders said.
The shilling changed hands at a record low of 2,901 in early trade, down from Thursday's low of 2,880, according to Thomson Reuters data, before swinging back to trade as high as 2,846 at 0750 GMT.
"The Bank of Uganda (BoU) has intervened in the market and it has buoyed the shilling substantially," Raymond Mutibwa, trader at Standard Chartered Bank Uganda.
"It ...is likely to make more gains as the BoU offloads more dollars, because it's still in the market," he said.
Emerging market currencies have taken a pounding this week as investors fled risky assets spurred by euro zone debt woes and fears that both Europe and the United States could slip back into recession.
"It looks as though the Ugandan shilling is tracking the Kenyan shilling which is also in trouble, but also it's reflecting investor gloom toward risky and fragile currencies like ours," said Rogers Lutaaya, trader at Bank of Africa Uganda.
The Ugandan shilling has been under pressure against the dollar since the start of this year, long before the latest bout of turmoil in global markets. Reuters
Uganda shilling gains ground