Shilling remains unchanged

The Uganda shilling continued to soften against the dollar on the back of a rebound in demand mainly from the importers last week.

On Monday, commercial banks quoted the local unit at 3,624/3,634, unchanged from Friday and Thursday's close of 3,624/34 buying and selling respectively.

Stephen Kaboyo, the Alpha Capital Markets CEO, noted that earlier on last week, the scope for shilling stability was opened up by market perception that the Central Bank was to remain aggressive in its mop of excess liquidity.

Trading was in the range of 3625/3635.

In the bond market, the 3 and 10 year bond auctions were under-subscribed. Bank of Uganda (BOU) mopped sh92.8billion against the offer of 160 billion. Yields edged up.

"In the international currency markets, the US dollar continued to rally as oils prices surged following the long awaited the Organization of the Petroleum Exporting Countries (OPEC) decision to cut prices while British pound remained firm," Kaboyo said.

Kaboyo added: "In the coming weeks, the shilling is likely to remain volatile undermined by cyclical demand for dollars as market participants set focus on the upcoming BOU monetary policy meeting."