KAMPALA (Reuters) - The Ugandan shilling was steady against the dollar on Monday as market players awaited the outcome of a central bank rate decision and elections in neighbouring Kenya.
Kenyans voted on Monday in a general election they hope will help restore the nation's reputation as one of Africa's most stable democracies after a disputed 2007 presidential vote triggered nationwide violence.
That unrest five years ago hammered Kenya's economy and cut off key trade routes into its landlocked neighbours such as Uganda, Rwanda and South Sudan, leading to shortages in fuel and other materials and a spike in prices.
"What happens over the next one to two days will be crucial," said Ahmed Kalule, trader at Bank of Africa.
"If tell-tale signs start to emerge of the possibility of violence we might start to see some scrambling for the dollar and shilling weakness."
Hours ahead of voting, at least 15 people were killed on Kenya's coast in attacks senior police officers blamed on a separatist movement which had threatened to disrupt the polling.
If the link is confirmed, it would suggest different motives to those that caused the post-election mayhem in 2007-8 and could limit the impact of Monday's killings.
At 1220 GMT commercial banks in Kampala quoted the currency of east Africa's third-largest economy at 2,650/2,660, marginally weaker than Friday's close of 2,647/2,657.
The central Bank of Uganda (BoU) is due to announce its benchmark Central Bank Rate (CBR) for March on Tuesday. Money market analysts broadly expect the regulator to leave the rate unchanged at 12 percent for a third consecutive month.
The shilling, which is up 1.3 percent against the greenback so far this year, has been pegged in a range of 2,630-2,700.
"The shilling is expected to trade range-bound as market awaits the outcome of the Kenyan elections," Stanbic Bank, said in a market briefing.