Shilling continues to trade firmly on Thursday

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The Uganda shilling continued to trade with a firm tone on Thursday, hovering close to the 3450-currency pair support mark in a session that mixed price action. 

The local unit benefited from the residual portfolio inflows as the offshore investor sold dollars to buy the shilling, enabling the settlement of their recent heavy investments in government securities.

Market observers at Absa noted that demand from corporates in the manufacturing, energy and telecom sectors was seen during the day, with dip buying keeping intraday trading in a narrow range. 

The shilling closed at the 3455/3565 level compared to the opening of 3458/3568 and the local unit is forecasted to extend its winning streak to the 3450 level, before consolidating the gains within the 3445-3500 in the near term.

In the debt market, government has borrowed sh2.5 trillion from the domestic market following the settlement of treasury bonds that were sold through the central bank on Wednesday.

The money markets remained liquid with the interbank overnight and one-week rates averaged at 9.79% and 10.17%, respectively.