Ugandan shilling weakens on dollar demand from oil, manufacturing companies

KAMPALA (Reuters) - The Ugandan shilling lost ground on Monday, weakened by demand for dollars from firms in the oil and manufacturing sectors, though the local currency is seen rangebound in the week ahead. At 0849 GMT commercial banks quoted the currency of east Africa's third-largest economy at 2,585/2,590, compared to Friday's close of 2,578/2,583. "The shilling has weakened slightly, largely from demand pressure by corporate players in the manufacturing and oil sectors," said Benon Okwenje, trader at Stanbic bank. Money market analysts, however, expected the shilling to maintain a relatively firm footing, in part underpinned by the central bank's aggressive tightening of monetary policy last week. The bank hiked its policy rate to 12 percent, from 11 percent, to rein in inflation, which topped 7 percent in August. "We see (the shilling) trading rangebound because we've noticed whenever it hits 2,600 it experiences significant resistance," Okwenje added.