Ugandan shilling firms on tighter liquidity, S&P credit rating
KAMPALA (Reuters) - The Ugandan shilling strengthened on Tuesday, buoyed by a central bank tightening of liquidity and Standard and Poor's affirming Uganda's sovereign credit rating. At 1104 GMT commercial banks quoted the shilling at 2,625/2,635, stronger than Monday's close of 2,635/2,645. "The market was already short on shillings and then the central bank made liquidity tighter with a repo," said Shahzad Kamaluddin, trader at Crane Bank. Kamaluddin said Bank of Uganda mopped up 170.5 billion shillings ($65 million) via a seven-day repo. S&P on Monday affirmed Uganda's B credit rating - which classes its debt as speculative - with a stable outlook, citing high GDP growth rates, political stability and infrastructure investments. "The rating that came in, especially the stable outlook, is also backing a positive sentiment for the shilling," Kamaluddin added. The shilling is now down 4 percent in the year to date and analysts say its short-term outlook may also benefit from a likely uptick in offshore appetite for Ugandan debt.
