The Ugandan shilling was stable on Wednesday, as last week's payments of mid-month tax obligations helped dry up supply of the local currency, leading to subdued demand for the greenback.
Shilling stable, liquidity scarcity offers support
At 0955 GMT, commercial banks quoted the shilling at 3,470/3,480, unchanged from Tuesday's close.
"After last week's (mid-month) tax payments, there's a shortage of shillings," said Shahzad Kamaluddin, a trader at Crane bank.
Kamaluddin said the scarcity of shillings was limiting appetite for dollars from commercial banks and corporate firms and keeping the local currency on an even keel.
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