The Uganda shilling weakened further today, depreciating from opening levels of 3735 / 3745 to close the day at 3750/3760 against the dollar, according to Thursday Absa Bank market Report.
The bank’s acting Head of Trading Richard Nsubuga attributes the decline was driven to strong corporate demand for hard currency from the energy, manufacturing, and aviation sectors, as well as from several government parastatals.
Although month-end inflows provided some support, they were insufficient to offset the heightened dollar demand and underpin the local currency.
In the money markets, liquidity conditions continued to improve, with overnight and one-week funding rates averaging 9.75% and 9.90%, respectively. Meanwhile, the Bank of Uganda remained active in its liquidity management operations, mopping up UGX 910 billion from the market through its Open Market Operations instruments.
