Business
Shilling holds steady as bond auction draws strong demand
Traders said dollar inflows from commodity exporters and charitable organisations continued to support the shilling, but this support was largely absorbed by demand from corporates in the manufacturing and energy sectors.
Shilling holds steady as bond auction draws strong demand
By: Ali Twaha, Journalist @New Vision
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The Uganda shilling remained broadly stable against the dollar on Wednesday, trading within the 3,728 to 3,738 range, even as the local currency showed signs of vulnerability during the session.
Traders said dollar inflows from commodity exporters and charitable organisations continued to support the shilling, but this support was largely absorbed by demand from corporates in the manufacturing and energy sectors.
Money market liquidity remained comfortably balanced during the day, with overnight rates averaging 9.09% according to market data from Absa.
Money market liquidity remained comfortably balanced during the day, with overnight rates averaging 9.09% according to market data from Absa.
At the Treasury bond auction held during the day, the Bank of Uganda reopened the benchmark 2 year, 5 year and 15 year bonds, offering sh990b to the market.
The auction attracted strong investor demand, supported by ample liquidity and coupon reinvestment flows, with accepted bids reaching sh1.05 trillion, well above the amount on offer.
The bonds cleared at 11.70% for the 2 year paper, 13.75% for the 5 year paper and 15.20% for the 15 year paper.
The auction attracted strong investor demand, supported by ample liquidity and coupon reinvestment flows, with accepted bids reaching sh1.05 trillion, well above the amount on offer.
The bonds cleared at 11.70% for the 2 year paper, 13.75% for the 5 year paper and 15.20% for the 15 year paper.