Ugandan shilling slips versus dollar

Tue Sep 7, 2010 10:55am GMT

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KAMPALA, Sept 7 (Reuters) - The Ugandan shilling UGX= weakened slightly against the dollar on Tuesday, due largely to interbank and corporate client dollar buying, traders said.

At 1035 GMT leading commercial banks in Kampala traded the local currency at 2,254/2,264 per dollar up from 2,243/2,252 at Monday's close. Tuesday's trading opened at 2,248/2,253.

"It's basically banks covering short dollar positions which has moved the shilling rate lower," said Rogers Lutaaya, a trader with Bank of Africa Uganda.

Lutaaya said he did not expect this level of demand for the greenback to be sustained.

Traders forecast the shilling will trade within a 2,250-2,265 range in the coming days.

Other traders said some corporate demand and a strengthening dollar globally had also affected rates.

"The shilling has depreciated a bit due to a bullish dollar against the majors globally. I think there is also a bit of corporate demand," said Lucas Ochieng, head of treasury at Orient bank.

Ochieng expected the shilling to hold steady at its current levels because of low dollar inflows from non-governmental agencies.

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