Ugandan shilling steady vs dollar, seen weaker

The Ugandan shilling held steady against the dollar on Monday, but traders said it could weaken in the days ahead, if the central bank cuts rates further due to falling inflation.

The Ugandan shilling held steady against the dollar on Monday, but traders said it could weaken in the days ahead, if the central bank cuts rates further due to falling inflation.

At 1132 GMT, commercial banks posted the shilling at 2,470/2,480, barely moved from Friday's close of 2,475/2,485.

"The shilling has been stable for a while, but we expect some corporate (dollar) demand if the central bank eases its rate after inflation comes in lower this month," said Ali Abbas, head of Treasury at Crane bank.

The central bank is scheduled to set its key lending rate on Aug. 2, after the release of July inflation data on July 31. Most analysts expect the rate of inflation to fall, offering policymakers room to slash rates.

The central bank cut its benchmark rate in the last two policy meetings to 19 percent and signalled it is prepared for more easing to stimulate slowing economic growth.

 

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