Ugandan shilling stable, debt auctions may offer support

May 28, 2013

The Ugandan shilling was stable on Tuesday ahead of Treasury bill and bond auctions this and next week at which interest from foreign buyers could offer the currency support, traders said.Commercial banks quoted the shilling at 2,600/2,610, unchanged from Monday's close.

KAMPALA - The Ugandan shilling was stable on Tuesday ahead of Treasury bill and bond auctions this and next week at which interest from foreign buyers could offer the currency support, traders said.

Commercial banks quoted the shilling at 2,600/2,610, unchanged from Monday's close.

"End-month conversions are providing some relief to the shilling amidst a lull in customer appetite," said Thaib Lubega, trader at Stanbic Bank.

The shilling should remain supported "as we are likely to see some portfolio flows chasing the unscheduled ...bond (sales) next week."

The Bank of Uganda is due to auction 100 billion shillings ($38.3 million) worth of Treasury bills of all tenures on Wednesday, followed by a sale of three and five-year Treasury bonds worth a total of 160 billion shillings on June 5.

The local currency has risen 3.2 percent against the dollar in the year to date, having hit a 14-month low of 2,715/2,725 in early January.

"The market is looking up to tomorrow's Treasury bill auction for some support to the shilling ... offshore investors tend to participate more in the short-term instruments," said Ahmed Kalule, Trader at Bank of Africa.
 

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