Ugandan shilling gains on weak dollar demand
Publish Date: Jan 08, 2014
Ugandan shilling gains on weak dollar demand
  • mail
  • img

KAMPALA - The Ugandan shilling gained on Wednesday, boosted by scant appetite for dollars, but traders said a drop in yields on government debt were a risk in coming weeks.

Commercial banks quoted the shilling at 2,517/2,522, up from Tuesday's close of 2,520/2,525.

"Demand for dollars is very sluggish because appetite from our corporate customers is still absent ... we're seeing the shilling picking up gains," said Faisal Bukenya, head of market making at Barclays Bank.

However, declining yields on government debt could put pressure on the shilling and erase Wednesday's gains, traders said.

"With the downward trend in yields, we're likely to see some of the offshore investors not rolling over their debt holdings once they mature," said Ahmed Kalule, trader at Bank of Africa. "If that happens, dollar flows will decline and the shilling will come under pressure."

At a Treasury bill auction on Wednesday worth 105 billion shillings ($41.67 million), rates on the 182- and 364-day paper dropped by more than 130 basis points. The yield on 92-day bills edged up slightly.

At the latest Treasury bond auction, worth 130 billion shillings on Jan. 2, yields on two- and five-year bonds fell by more than 80 basis points.

Offshore buyers of government debt are a key source of hard currency for Uganda, east Africa's third-largest economy. Confidence in the shilling could wobble if the lower yields curb the appetite for the debt, traders say.


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

  • mail
  • img
blog comments powered by Disqus
Also In This Section
BAT tobacco giant paid bribes in east Africa
British American Tobacco paid bribes to officials in east Africa, including two members of a convention created under the World Health Organization (WHO) to combat smoking, according to a BBC investigation airing on Monday....
Govt  allocates sh8bn for skills training
Government has announced that it will allocate more funds to Enterprise Uganda to train more Ugandans in business, managerial, marketing and communication skills to run their own enterprises, according to the state minster for Finance, David Bahati...
Human resource training:  A missing link in cooperatives
Strategic human resource education and training remain a key missing link in the ongoing movement to revive co-operatives fully, a co-operative consultant has said....
Black Friday online shopping rivals stores in US
The closely watched survey said that about 151 million people shopped either in stores and/or online over the long weekend in the United States...
Bee farmers want processing technologies
FARMERS into Apiculture want technologies that will stop their honey from crystallizing and forming granules while on the shelves in selling points like supermarkets...
Gulf unwilling to tighten oil taps alone: analysts
Saudi-led Gulf OPEC members will reject pressure to shoulder the cost of cutting oil production alone despite warnings that prices risk sliding further, officials and analysts say....
Do you think Uganda is winning the fight against AIDS?
Can't Say
follow us
subscribe to our news letter