The Ugandan shilling held steady against the dollar on Wednesday and traders said dollar inflows into the local debt market could support the currency.At 1128 GMT, commercial banks quoted the currency of east Africas third-largest economy at 2,575/2,585 to the dollar, unchanged from the previous days close.The market is fence-sitting and I think the shilling probably wont break out of the current range, said Shahzad Kamaluddin, trader at Crane Bank.Traders saw little impact on the currency from the re-election of U.S. President Barack Obama.I doubt it will have any impact on the shilling because its been really flat since morning but were watching ... I reckon it will be local factors that will be key, said a trader at a leading commercial bank in Kampala.Other market participants said the shilling could receive support from hard currency inflows into the debt market from investors abroad.Like other frontier markets, Uganda has benefited from offshore investments into its debt market in recent years, as investors chase high yields.We havent seen big signs of a return of offshore investors but the recent uptick in yields is encouraging their confidence in the shilling, said Sophie Achak, trader at Stanbic Bank.Agencies
