August 12, 2011 / 1:42 PM / 8 years ago

UPDATE 1-Uganda shilling hits record low, cbank steps in

* Shilling trades at record low 2827.9 vs dollar
    * Firms after cbank sells dollars
    * Seen hovering around 2,800 per dollar

 (Adds latest prices)	
    By Elias Biryabarema	
    KAMPALA, Aug 12 (Reuters) - Uganda's central bank sold an
undisclosed amount of U.S. dollars to help the shilling rally
against the greenback in the final minutes of trading on Friday,
after the local currency sunk to another record low. 	
    The Uganda shilling firmed to a settled price of
2,780 against the dollar at the market's close, having touched
an intraday low of 2827.9, Thomson Reuters data showed.	
    Market traders confirmed the central Bank of Uganda had sold
dollars but were not able to say how many. 	
     "The shilling is expected to hover around 2,800 which
remains the key psychological level unless we get a sudden huge
demand from one of the key sectors which could drive us back to
today's low levels," said Lucas Ochieng, head of Treasury at
Orient Bank.	
    Dollar demand from the oil sector had helped drive the
shilling south earlier in the day.	
    "The oil sector came in and bought a huge amount of money
dollars, possibly upwards of $10 million, and interbank demand
is also still high, so the shilling is under a lot of pressure
now," said Faisal Bukenya, head of market making at Barclays
Bank Uganda. 	
    He said uncertainties in the global economic environment
were also adding to the shilling's woes and that the central
bank, Bank of Uganda, was likely to inject dollars in the market
to relieve pressure on the supply side. 	
    "We are witnessing a period where capital is being eaten
into by foreign exchange hikes. Bank of Uganda has this week not
yet intervened though market players are patiently in high
anticipation," said a market report by Bank of Africa Uganda. 	
    Bank of Uganda regularly intervenes in the forex market when
the exchange swings widely either way to restore stability.  	
    Traders say the local currency is also being undermined by
the weakening of the Kenya shilling . Kenya, east Africa's
biggest economy, is Uganda's key regional trading partner.	
  UGX Spot Rate.....UGX= 	
  Ugandan Shilling Money Guide.... UGX/1 	
  Calculated Cross Rates..........UGXX= 	
  Deposits & Forwards.............UGXF= 	
  Uganda Equities Guide....... UG/EQUITY 	
  Uganda All Share Index.........ALSIUG 	
  Shilling background ..... UGX/BKGDINFO 	
  Ugandan Debt Guide............ UG/DEBT 	
  All Uganda Bonds............. 0#UGTSY= 	
  Uganda T-Bills.............. 0#UGTSYS= 	
  Uganda Benchmark............. 0#UGBMK= 	
  Central Bank BOUGINDEX 	
  Ugandan Contributor Index.... UG/CONT1 	
  Uganda Coffee Prices...... COFFEE/UG01 	
 (Writing by Richard Lough; Editing by James Macharia)
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