The Ugandan shilling weakened on Tuesday, weighed down by dollar appetite from energy importers and manufacturers, traders said.
A report by Centenary Bank noted that the shilling is forecast to weaken against the dollar.
“The dollar index rose to near two-week highs of 113.59 on Wednesday. The pound fell to a two-week low against the dollar and euro on Tuesday, crushed by comments from Bank of England Governor Andrew Bailey who reiterated the bank will end its support for the bond market on Friday despite pleas from pension funds to extend it,” Centenary Bank said. The euro rose to a two-week high versus the pound of 88.60 pence.
This outlooked boded well with a report by Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda who noted that the currency continued to weaken marginally to close Tuesday’s session at the 3830/3840 level from an opening of 3825/3835 with continued pockets of demand from the interbank and Corporates.
“Overnight yields remained elevated at averages of 11.48%. Money markets faced tight liquidity conditions,” she said.