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Shilling to experience mild depreciation this week

By Racheal Nabisubi

Added 24th October 2016 03:55 PM

Commercial banks quoted the local unit at 3439/49 the same as Friday's close

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Commercial banks quoted the local unit at 3439/49 the same as Friday's close

The Ugandan Shilling recouped some of its losses after a period of volatility that led that saw it sink to an 8 month low at the end of last week. 

The shilling strengthened to trade below the key level of 3450 that was previously breached. The interbank was active with commercial banks cutting long positions amidst improved inflows.

In the international markets, Stephen Kaboyo of Alpha Markets Partners said that the US Dollar lost some ground against the major currencies following the release of the US jobless report that indicated that claims were on the increase.

In the UK, the British Pound dipped as retail sales were reported flat for the month of September.

By Monday morning, commercial banks quoted the local unit at 3439/49 the same as Friday's close, buying and selling respectively.

"This week, the shilling is likely to hold steady with mild bias towards depreciation as the current levels seem to be attractive to market players and this could kick up demand," Kaboyo said.

However, he noted that markets will draw comfort from the government inflow of $200m, a loan from PTA bank that is expected to reduce the need for government to source dollars from the market.

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