The Ugandan shilling was stable on Tuesday and traders said potential lowering of rates by the central bank could curb hard currency inflows from offshore debt investors this year.As at early morning, yesterday, commercial banks quoted the shilling at 3,635/3,645, unchanged from Friday’s closing level.
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Last year, the currency of Africa’s biggest coffee exporter was mostly stable in a band of 3,550-3,650 against the dollar, supported by export earnings and foreign funds investing in the local debt market.
Traders said a loose central bank monetary policy that has depressed yields on government debt could put pressure on the shilling due to a drop in the inflows from abroad into government securities.The low yields will likely push the shilling past the psychologically key level of 3,700, said Faisal Bukenya, head of treasury at Exim Bank.
Source: G Business
