KAMPALA (Reuters) - The Ugandan shilling edged down against the dollar on Monday and traders were divided on future direction, with some forecasting weakness due to demand for the U.S. currency from the energy sector.
At 0610 GMT commercial banks quoted the local currency at 2,277/2,282 per dollar, slightly lower than the 2,275/2,278 at Friday's close.
"Activity is yet to pick up, but the local unit will probably depreciate this week because we expect some substantial dollar demand from the energy sector. I will not be surprised if we break the 2,295 level," said Faisal Bukenya, head of market making at Barclays Bank Uganda.
He said the shilling is expected to trade within the 2,275/2,290 level over the next few days.
Other traders predicted the shilling could stabilise on the back of support from end month dollar inflows from aid agencies.
"Looking ahead, we expect the currency to trade the 2,260/2,290 range going into the end of the month as dollar inflows are likely to increase mainly from non-governmental organisations," Standard Chartered said in a market report.
Stanbic Bank Uganda said it expected the shilling to trade in a fairly tight range during Monday's trading session, at between 2,270 to 2,285.
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