KAMPALA Oct 23 (Reuters) - The Ugandan shilling traded flat against the dollar for a third straight session on Tuesday but could come under pressure from dollar demand from importers and the energy sector. At 1045 GMT, commercial banks quoted the currency of east Africa's third largest economy at 2,575/2,585, unchanged from Monday's close. "As we approach the end of the month we might see an upswing in players taking dollar positions," said Robert Nyehangane, a trader at Housing Finance Bank. But traders said investors' restored confidence in the shilling would likely be tested if the central Bank of Uganda extended its monetary easing cycle into a sixth month in November. Uganda's central bank cut its key lending rate at the beginning of October, a fifth straight cut that lopped off 2 percentage points to leave the rate at 13.0 percent. The bank's Governor Emmanuel Tumusiime-Mutebile said further cuts were likely to be small after a dramatic fall in inflation. The shilling shed about 5.7 percent between end July when traders said the bank's loosening cycle began filtering through the economy and Oct. 11 when it hit an 8-month low of 2,608 per dollar, Thomson Reuters data showed. Sales of hard currency by the central bank, rising yields on government paper and tight liquidity have helped the shilling recover to its current levels. Uganda's statistics office is due to release October's consumer price index data on Oct. 31. "Inflation is now around the central bank's target, but the growth target is still unmet," said a trader at a leading commercial bank. "So we might see some small CBR cut which could possibly shave some value off the shilling."

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