Ugandan shilling firms on weak dollar demand, commodity export inflows

KAMPALA (Reuters) - The Ugandan shilling strengthened against the dollar on Wednesday, boosted by weak demand for dollars and inflows from commodity exports. At 1116 GMT commercial banks quoted the currency of east Africa's third-largest economy at 2,530/2,540, stronger than Monday's close of 2,538/2,548. Markets were closed on Tuesday as it was a holiday in Uganda. "The main factor fuelling the shilling rally is low appetite for dollars from both commercial banks and offshore players," said Peter Mboowa, a trader at KCB Uganda. "Some inflows are also coming in from commodity exporters." Uganda ships a range of commodities including tea, tobacco and coffee for which the country is Africa's biggest exporter. In September, coffee shipments rose to 224,301 60-kg bags, sharply up on the 176,301 bags exported in the same month last year as farmers released large volumes to create storage room for the incoming crop. A trader from a leading commercial bank said the shilling was also being buoyed by low local currency liquidity and anticipated inflows from offshore investors taking part in a Treasury bill auction this week.