Uganda shilling touched 2940/50 level in trading

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After several interventions, the shilling had closed at 2926/36 on Friday.

Daniel Sage Muganza, a forex trader at Centenary Bank, said the shilling had touched 2940/50 levels in the early trading session on Monday.

?Most banks have taken long positions because of dividend payments. There is a scarcity of the shilling which will support the local unit in the short term.

?However, in the long term ? say one month ? the shilling could weaken further,? Muganza says.

The Uganda shilling tumbled last week touching a fresh record low of 3120/30 before heavy intervention by the Central Bank shored it up.

The market saw a surge in corporate demand with no matching supply.

?Yields were unchanged in a quiet week with no sizeable interest from investors. Central Bank announced two- and five-year bonds to be offered on 25th March and we expect yields to inch up as liquidity in the cash markets remain tight,? says James Mutuku, head of financial markets at Standard Chartered Bank.

He says the dollar-shilling pair is expected to trade sideways in a wider range of 2870 on the downside, and 2990 on the top.

?The Central Bank is expected to continue using monetary policy tools at their disposal, in an effort to maintain price stability,? Mutuku points out.

Elsewhere, the Kenyan shilling lost ground to trade 91.65/75 last week with sizeable demand from telecommunication and energy sectors.

Market expects the unit to hold just below 91.95 as the resistance level and 91.30 support.

The Tanzanian shilling followed suit as the rest of the East Africa currencies closing 1850/55 from the 1835/40 though mild activity registered.

?We expect the trend to gradually hold in the 1840-65 range in the coming week? says Mutuku.

By Samuel Sanya, The New Vision

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