Business
Dollar demand persists in Thursday’s session
Traders said the reversal was primarily driven by strong hard currency demand from corporates, interbank and offshore players, which outweighed the limited dollar supply in the market.
Dollar demand persists in Thursday’s session
By: Ali Twaha, Journalist @New Vision
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The Uganda shilling surrendered the gains recorded in the previous session, depreciating sharply against the US dollar as it moved from sh3960 / sh3970 at the open to close at sh4045 / sh4055.
Traders said the reversal was primarily driven by strong hard currency demand from corporates, interbank and offshore players, which outweighed the limited dollar supply in the market.
Demand pressures persisted throughout the session despite the Bank of Uganda's intervention through dollar sales done yesterday.
According to an Absa market report, liquidity conditions remained constrained following yesterday’s central bank rate hike from 9.75% to 12.00%, with market participants continuing to adjust to the tighter monetary environment.
As a result, funding pressures persisted in the interbank market, pushing overnight funding rates higher to average at 11.63%. The tight liquidity backdrop is expected to keep short-term interest rates elevated in the interbank market.
According to an Absa market report, liquidity conditions remained constrained following yesterday’s central bank rate hike from 9.75% to 12.00%, with market participants continuing to adjust to the tighter monetary environment.
As a result, funding pressures persisted in the interbank market, pushing overnight funding rates higher to average at 11.63%. The tight liquidity backdrop is expected to keep short-term interest rates elevated in the interbank market.