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Ugandan Shilling Pushed Lower By Offshore Dollar Demand
16/08/2013
KAMPALA (Reuters) - The Ugandan shilling fell on Friday after positive economic data from the United States a day earlier prompted offshore participants to cut their exposure to risky assets.
At 1430 GMT, commercial banks posted the currency of east Africa's third-largest economy at 2,575/2,580 per dollar, having touched an intraday low of 2,580/2,590 in the early hours of the session. It had closed on Thursday at 2,565/2,570.
Traders said there had been plenty of dollar buying interest from offshore market participants, after the latest U.S. jobs and inflation data supported unwinding of the Federal Reserve's economic stimulus, putting pressure on the shilling.
"That speculative offshore demand quickly faded and since the local (dollar) appetite is still soft the shilling corrected and erased some of the losses," said Ahmed Kalule, trader at Bank of Africa.
A weak consumer spending outlook, mainly due to high lending rates, had helped keep the shilling on an even keel in recent weeks.
This month, the central bank maintained its largely cautious monetary policy stance, leaving its key lending rate at 11 percent, unchanged from July, citing worries over inflation.
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