Uganda shilling slightly weaker on Wednesday

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The Uganda shilling closed the day’s session trading at 3560 / 3570 levels, a tad weaker compared to the opening levels of 3555/3565 levels.

Traders said the local unit's depreciation was mainly attributed to the demand from clients in the manufacturing and energy sectors, which outweighed inflows on the day. The shilling is still expected to trade stable in the near term within 3540-3575 levels.

Money markets remained tight according to Absa market report as corporates settled mid-month tax obligations, with interbank overnight and one-week rates averaging 9.85% and 10.00%, respectively.

In the debt market, the results from Wednesday’s treasury bill auction aligned closely with market expectations, with yields remaining broadly flat. The benchmark tenors cleared as follows: 91-day at 11.033%, 182-day at 13.071% and 364-day at 14.900%.

The Ministry of Finance accepted a significant sh521.07b in face value, representing an allocation of 147%, well above the auction offer of sh355b.