Uganda shilling steady as investors eye upcoming bond auction

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The Uganda shilling held firm on Monday, trading within the 3,475 to 3,485 range as demand and supply from market players remained largely balanced.

Traders said the local unit is expected to stay within the 3,430 to 3,500 band in the coming days, supported by steady inflows and moderate corporate demand.

Money markets were liquid, with overnight and one-week interbank rates averaging 10.00% and 10.25% according to Absa market data.

In the debt market, the Bank of Uganda plans to reopen the 3-year, 10-year, and 20-year treasury bond tenors. The central bank is targeting sh234b, sh330b, and sh430b from the sale, respectively.

Analysts expect decent participation from investors seeking to lock in yields on medium to long-term securities.

The bond auction will provide an early test of investor appetite ahead of next month’s policy meeting, as markets continue to weigh inflation trends and government borrowing needs.