The Ugandan shilling surrendered ground for most of the trading sessions during the week ending Feb.22 threatening to breach the 2700 resistance level against the US dollar, according to Stephen Kaboyo, managing director at Alpha Capital Partners.

"What started as a marginal weakening picked steam mid week as panic buying set in," Kaboyo said, adding the depreciation was mainly on account of a strong rebound in demand from importers particularly oil sector as all eyes were set on the Kenya elections.

In equal measure, Kaboyo said, the excess liquidity in the market as a result of heavy redemptions from securities and short term open market operations in excess of 400 billion provided more than sufficient cover and added to the bearishness of the shilling.

He said towards the end of the week, market expectations were that the Bank of Uganda would intervene to calm the storm.

He said market dynamics in the coming weeks, will largely depend on Bank of Uganda's market actions on the supply side, open market operations and end of month flows. It is projected that demand will continue pulsating rapidly.

"Trading levels are expected in the range of 2650/2700 per US dollar," he said.