Shilling holds steady ahead of July inflation data

________________

The Uganda shilling was unchanged against the dollar on Wednesday ahead of the release of July inflation data by the Uganda Bureau of Statistics (UBOS) on July 31.

The shilling traded in the same narrow range market participants had widely anticipated, opening and closing at the 3580/3590 levels. The local unit has managed to hold on to this strong region, supported by US dollar inflows from commodity exporters amid subdued demand from across sectors. The local unit is still anticipated to trade within the 3570-3620 range in the near term.

Money markets were liquid according to Absa data, with the overnight and one-week funding trades averaging at 9.19% and 10.20%, respectively. Bank of Uganda held a treasury bill auction today, and the yields remained stable at 15.254% and 13.551% for the 364-Day and 182-Day, respectively, while the 91-Day dipped marginally to 10.921% from 12.005% in the previous auction.

Uganda’s annual headline inflation rose slightly to 3.9% in June from 3.8% in May, according to UBOS.