Ugandan shilling weakens, central bank mop up may help

By Elias Biryabarema

KAMPALA, April 29 (Reuters) - Dollar demand from commercial banks, energy and manufacturing firms weighed on Uganda's shilling UGX= on Tuesday although central bank moves to soak up excess liquidity helped curb its losses.

At 0931 GMT commercial banks quoted the currency of Africa's largest coffee exporter at 2,516/2,626, weaker than Monday's close of 2,511/2,522.

"We have seen losses on the part of the shilling because of buying pressure from the manufacturing and energy sectors," said Faisal Bukenya, head of market making at Barclays Bank.

"There was some (dollar) purchases in the interbank (market) which also undermined the shilling."

Market players are awaiting the release, expected on Wednesday, of April consumer price inflation before making bets on the central bank's likely May monetary policy decision.

Headline inflation edged up in March to 7.1 percent from February's 6.8 percent but the central bank left its key lending rate unchanged at 11.5 percent at its April meeting.

ID:nL5N0MU292

Sage Daniel Muganza, trader at Centenary Bank said the Ugandan currency was likely to draw support from efforts to mop up excess liquidity by the Bank of Uganda.

He said the central bank had issued a seven-day repo on Tuesday at 11.5 percent but that it had not yet disclosed how many shillings had been drained from the market.

UGX Spot Rate..... UGX=

Ugandan Shilling Money Guide.... UGX/1

Calculated Cross Rates.......... UGXX=

Deposits..................... UGXDEPO=

Deposits & Forwards............. UGXF=

Uganda Equities Guide....... UG/EQUITY

Uganda All Share Index........ .ALSIUG

Shilling background ..... UGX/BKGDINFO

Ugandan Debt Guide............ UG/DEBT

All Uganda Bonds............. 0#UGTSY=

Uganda T-Bills.............. 0#UGTSYS=

Uganda Benchmark............. 0#UGBMK=