Ugandans are worried. The Ugandan shilling lost major ground on recently, weakened by strong dollar demand from fuel firms and panic-buying by commercial banks.
It is however, expected to recoup some of its losses next week. reports CNBC Africa.
“We had very strong appetite from fuel firms,” said Ahmed Kalule, a trader at Bank of Africa. Also since the greenback has been stuck for some time a lot of players were caught short so when this demand came in it set off panic buying in the market.”
According to traders, fuel firms are exerting demand to stock up enough dollars to pay for extra fuel imports to meet an expected surge in consumption from transporters as the year ends.
“Market outlook indicates a bullish shilling in the short run supported by export flows, portfolio flows and seasonal Diaspora flows,” said Stephen Kaboyo, managing director at Alpha Capital Partners.
He said that on December 4th, the 15-year maiden bond that the central bank is due to sell, together with three-year papers and is likely to attract offshore investors and boost the shilling.