Shilling trades flat Thursday ahead of auction

The Uganda shilling traded stable during Thursday’s session with the currency closing at the 3670/3680 levels from the day’s opening of 3667/3677.

Money markets continued to face tight liquidity during Thursday’s session with overnight yields elevated at averages of 10.98%, Absa market data shows.

The Bank of Uganda is scheduled to auction three bonds on October 23 including; a two-year bond, five-year bond and a 15-year bond. The central bank is aiming to raise about sh1 trillion from the local market in the auction.

In the global currency markets, the European Central Bank (ECB) on Thursday lowered interest rates to 3.25% for the third time this year, as inflation in the Eurozone slowed.

An updated inflation reading released ahead of the ECB’s announcement showed that headline consumer price growth decelerated to an annualized 1.7% last month. The mark, which was initially 1.8%, is below the central bank's stated 2% target.