KAMPALA (Reuters) - The Ugandan shilling was little changed against the dollar on Friday, but traders see the local currency weakening ahead of the 2013/2014 budget reading in early June.
At 1034 GMT commercial banks quoted the currency of east Africa's third-largest economy at 2,590/2,600, barely moving from Thursday's close of 2,595/2,605.
The local currency has been under elevated pressure this week after an upsurge in dollar demand by commercial banks, offshore investors and importers.
Stephen Kaboyo, managing director of Alpha Capital Partners said the shilling's outlook was bearish.
"As we count down to the budget statement, we could see a sentiment driven rate as indications arising out of the budget framework paper suggest fiscal pressures in the new financial year," Kaboyo said.
Hit by a cut in western aid, the government says it plans to hike taxes over next financial year.
Money market analysts say such tax rises could undermine the shilling by dampening inflows of foreign investment.
"Shilling outlook is weak but end-month conversions from charities might give some cushion the depreciation risk," said Ali Abbas, trader at Crane Bank.
Source: http://news.yahoo.com/ugandan-shilling-seen-sliding-ahead-june-budget-reading-131542774.html
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