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Uganda Shilling weakens further

By Racheal Nabisubi

Added 17th December 2016 02:20 PM

By Thursday afternoon, the shilling was trading in the range of 3,596/3,606 weaker than Wednesday's close of 3,580/ 3,590.

Shilling 703x422

By Thursday afternoon, the shilling was trading in the range of 3,596/3,606 weaker than Wednesday's close of 3,580/ 3,590.

The shilling appreciated during the week almost breaking a key support level of 3575 supported mainly by export inflows and remittances during the week ending 16 December 2016.

Demand was receding as markets began year end slowdown.

By Thursday afternoon, the shilling was trading in the range of 3,596/3,606 weaker than Wednesday's close of 3,580/ 3,590.

In other economic news, Bank of Uganda reduced the CBR rate to 12% from 13% citing a need to boost economic activity with full acknowledgment of the prevailing inflationary pressures.

"In international markets, the US Federal Reserve raised interest rates and signalled faster increases in the coming year. The 25 basis point cut was widely expected by the financial markets," Stephen Kaboyo the managing Director of Alpha Capital markets said.

He noted that following the Fed decision, the dollar rallied to a record high against the major currencies while the emerging market currencies weakened.

Kaboyo added: "In the coming weeks, markets anticipate a continued bullish run for the shilling as markets enter into a slowdown mode for the end of year holiday season."

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