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Shilling weakens against Dollar, oil prices firm

By Racheal Nabisubi

Added 12th May 2017 04:40 PM

BOU was in the market propping up the currency through repo operations

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BOU was in the market propping up the currency through repo operations

 

The Uganda Shilling shed its gains as demand picked up mainly from commercial banks building positions and a bit of import demand at the end of the week.

Today, Bank of Uganda quoted at 3,631.29/3,641.29weaker than Thursday’s close of 3,628.5/3,638.47 buying and selling respectively.

“In the coming weeks, the shilling forecast indicates mild weakening and its likely to trade just below the key level of 3650 as demand continues to increase,” Stephen Kaboyo of Alpha Capital Partners said.

BOU was in the market propping up the currency through repo operations. Trading was in the range of 3630/40.

In fixed income market, the Central Bank offered sh180b in treasury bills. Yields marginally increased on the 91 and 364 day to 10.247% and 13.903% while 182 day dropped to 11.500%.

 “The increase in the size of the offer can be interpreted to mean that government borrowing requirements are increasing as the fiscal year comes to an end” Kaboyo added.

In international currency markets, he stated that the US Dollar slipped as risk appetite faded and markets remained on the edge, with concerns on whether the latest crisis, sacking of the FBI boss James Comey by President Donald Trump, could impede the implementation of the long awaited economic plan.

The British Pound Sterling hit a three week high as markets seemed to be comfortable with political approach on Brexit.

In commodities, oil prices held firm at $50.46 on account of a fall in US inventories and Saudi Arabia cut in supplies.

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