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Shilling up ahead of debt auction results

By Vision Reporter

Added 26th March 2014 04:45 PM

THE Ugandan shilling gained slightly on Wednesday on anticipation that a local debt auction would draw money from abroad, and it was expected to strengthen further

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THE Ugandan shilling gained slightly on Wednesday on anticipation that a local debt auction would draw money from abroad, and it was expected to strengthen further as exporters and charities converted funds towards the end of the month.

At 0847 GMT, commercial banks quoted the currency of east Africa's third-largest economy at 2,558/2,568, marginally stronger than Tuesday's close of 2,560/2,570.

"The shilling has climbed slightly up because we anticipate some appetite from offshore investors for the bonds being auctioned today," said Manohar Miryala, the head of treasury at Crane Bank.

Bank of Uganda was expected to release later on Wednesday the results of a Treasury bond auction of two- and five-year notes worth 180 billion shillings ($70.23 million).

"We'll probably be seeing an improvement in inflows from exporters of agricultural commodities like coffee in the last days of the month," Miryala added.

Uganda is Africa's largest coffee exporter, and earnings from the beans are a key support for the shilling currency.

A trader at a leading commercial bank said the usual end-month inflows from non-governmental organisations (NGOs) "will probably buoy the shilling further". 

Shilling up ahead of debt auction results

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