Business
Ugandan shilling steady with auction to provide support
Publish Date: Jan 29, 2013
newvision
  • mail
  • img

KAMPALA - The shilling held steady against the dollar on Monday, with traders expecting the local currency to be supported by foreign investors participating in this week's Treasury bond auction.

The central bank is due to sell 100 billion shillings ($37.38 million) worth of 3-year Treasury bonds on Thursday.

At 1125 GMT, commercial banks in Kampala quoted the currency of east Africa's biggest coffee exporter at 2,660/2,670, unchanged from Friday's close.

"There's generally weak demand for dollars in the market which has kept the shilling steady but I anticipate the auction to boost the (dollar) supply side," said Faisal Bukenya, head of market making at Barclays Bank.

"So I see the shilling keeping a stable position."

Some market players say the local currency will take a cue from this month's inflation data due to be released on Thursday.

After cooling for much of 2012, price pressures in east Africa's third-largest economy have started to bubble again with headline inflation rising for a second straight month to 5.5 percent in December from November's 4.9 percent.

Analysts are keen to see whether prices surge again in January, which could push the central bank to hold its key lending rate again and potentially support the shilling.

Bank of Uganda this month left the rate unchanged at 12 percent from December to check the surge in prices and relieve the pressure on the shilling, which ended 2012 eight percent down against the dollar.

"The shilling is expected to remain range bound this week as Bank of Uganda will again be in the market with a Treasury bond auction," said a market note from KCB Uganda.

KCB said the local currency would oscillate in the 2,650 and 2,680 range.
 

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Pakasa Forum: Long queue for tickets at Vision Group offices
People queu outside the Vision Group head office in Industrial Area to receive their passes to the Fourth Pakasa Forum due tomorrow August 23 at Kampala Parents School in Naguru....
Pick your Pakasa access pass at New Vision offices
Access passes to the fourth edition of Vision Group’s Pakasa Forum on Saturday are now available at the New Vision reception on Plot 19/21, First Street, Industrial Area....
Fake inputs: Are the laws too weak?
The name Container Village in Kampala downtown rings an instant bell to every farmer who buys farm inputs. The place is no longer full of the containers from which the name was derived....
KCCA discourages taxi drivers from striking
Kampala Capital City Authority (KCCA) will continue engaging city drivers despite their intended Monday strike....
Pakasa Forum to broadcast live across East Africa
At least five television stations across the East African region will telecast Vision Group’s Pakasa Forum live this Saturday....
Ethiopian Airlines’ Entebbe-Juba route promising
Two weeks after Ethiopian Airlines launched a daily direct route from Entebbe to Juba, frequent flyers between Uganda and South Sudan seem to be embracing the development rather fast....
Will strict traffic laws reduce road accidents?
Yes
No
Can't Say
follow us
subscribe to our news letter