Kampala, Uganda | THE INDEPENDENT | The Uganda Shilling has strengthened against the dollar and other currencies as the festive season sets in. The Shilling has been trading in the range of 3,650/90 throughout the week, a marked gain compared to previous weeks.
Money market watchers attribute the strengthening of the Shilling to increased supply of hard currencies, including from Ugandans returning home for the festive season and remittances.
According Stephen Kaboyo, from Alpha Capital Partners, the strengthening of the Shillings is on account of inter-bank selloff as commercial banks squared positions ahead of the end of year holidays.
Kaboyo says in regional currency markets, the Kenya Shilling also strengthened against the dollar due to tight liquidity conditions as commercial banks sold dollars to meet the shilling reserve requirements amid flat dollar demand. Trading was in the range of 101.45/65.
Outlook for the Shilling, says Kaboyo, indicates a choppy market on account of slackened demand due to subdue business activity as major players shut down for the holiday season.