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UPDATE 1-Ugandan cbank seeks to sell forex for third straight day

Friday, 12 Oct 2012 | 2:46 AM ET

* Cenbank selling forex for third straight session

* Shilling has lost about 4 pct since mid-Sept

(Adds trader, background)

KAMPALA, Oct 12 (Reuters) - Uganda's central bank said it was in the market to sell an unspecified amount of foreign exchange for the third straight day on Friday, a move which strengthened the shilling slightly in the minutes after the announcement.

The local currency firmed to 2,590/2,600 at 0610 GMT from 2,600/2,610 before the announcement, Thomson Reuters data showed.

"The shilling hadn't really moved much but i think they're keen on demonstrating their determination to support the shilling and stem volatility in the market," Faisal Bukenya, head of market making at Barclays Bank in Uganda.

The shilling began a sustained weakening in late July as cuts to the central bank's key lending rate began filtering through the economy.

However, the shilling has fallen nearly 4 percent since Sept 19, a slide brought on by demand for the greenback from banks and offshore investors after a sharp fall in yields on government securities.

(Reporting by Elias Biryabarema; Writing by Richard Lough; Editing by George Obulutsa)

((Email: nairobi.newsroom@reuters.com)(Tel: +254 20 222 4717)(Reuters Messaging: richard.lough.thomsonreuters.com@reuters.net))

Keywords: UGANDA CURRENCY/

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