Shilling firms on Wednesday as inflows outweigh demand
Traders said demand for the dollar remained subdued through much of the session, allowing the shilling to gain ground.
The local currency closed at 3700/3710, firmer from the day’s opening levels of 3740/3750, as local banks and offshore investors sold dollars into the market.
KAMPALA - The Uganda shilling strengthened by about sh40 against the dollar on Wednesday, supported by steady inflows and muted appetite for the greenback.
The local currency closed at 3700/3710, firmer from the day’s opening levels of 3740/3750, as local banks and offshore investors sold dollars into the market. Traders said demand for the dollar remained subdued through much of the session, allowing the shilling to gain ground.
In afternoon trade, the unit briefly touched 3680/3690, its strongest level of the day, before the Bank of Uganda stepped in to buy dollars. The intervention nudged the shilling back to around 3705, helping to steady the market and prevent sharper appreciation.
On the money markets, liquidity conditions remained tight. Interbank overnight and one-week lending rates averaged 10.19% and 10.50% according to Absa market data, reflecting constrained shilling availability among banks.
In the debt market, yields in the day’s treasury bill auction were largely unchanged across tenors.
The 91-day, 182-day, and 364-day papers cleared at 10.00%, 11.659%, and 12.500%, respectively. The central bank accepted bids worth sh266.34b in face value.