KAMPALA, June 6 (Reuters) - The Ugandan shilling was stable against the dollar on Wednesday amid subdued demand for dollars.
At 0847 GMT, commercial banks posted the shilling at 2,485/2,495, unchanged from its close on Tuesday.
After recovering from a sharp drop ahead of a broadly anticipated rate cut on Friday, the shilling has since hovered around 2,490, in part supported by the central bank's remarks it would not let the euro zone turbulence pressure the shilling.
"I am betting the shilling will remain very much at the current levels," said Sophie Achak, chief dealer at Stanbic Bank.
The central bank cut its benchmark lending rate to 20 percent from 21 percent last month to spur credit flow and stimulate slackening economic growth.
The rate cut followed a fall in the country's year-on-year inflation in May, which came in at 18.6 percent from a revised 20.0 percent for April, helped by falling food costs.
Market participants said it would take time for commercial banks to lower their lending rates, meaning that demand for dollars from firms looking to invest in their businesses would remain elusive, keeping the shilling within a tight range.
