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Wednesday,October 23,2019 18:38 PM

Forex: Ugandan shilling weak

By Racheal Nabisubi

Added 4th July 2017 02:43 PM

Meanwhile, Uganda’s annual headline inflation has decreased

Shilling 703x422

Meanwhile, Uganda’s annual headline inflation has decreased

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The Ugandan shilling was weaker on Monday afternoon, trading at 3,590.83/3,600.83 buying and selling against the dollar respectively compared Friday’s close of 3,585.9/95.9.

 “The Uganda shilling held firm supported by inflows from commodities and NGO's, Central Bank liquidity mop up, against subdue corporate demand,” the CEO of Alpha Capital Partners Stephen Kaboyo said.

He added that the shilling outlook remains stable with range bound trading expected in the coming days.

Last week, in the money market, overnight rates averaged 6% while I week funds traded at 10%.

Meanwhile, Uganda’s annual headline inflation has decreased to 6.4% in June from 7.2% that was recorded in May 2017, statistics from the Uganda Bureau of Statistics (UBOS) have indicated.

The UBOS Director Macroeconomic Statistics Dr. Chris Mukiza attributed the decrease to a decline in prices of food crops from 23.1% in May to 18.1% in June 2017.

“Food crops especially prices of vegetables and fruits declined from 15.5% and 32.4% to 9.6% and 32.4% respectively,” Mukiza said.

In addition, core inflation, which strips out food, fuel, metered water and electricity prices which are volatile to price changes, dropped to 4.9% in June from 5.1% recorded in May.

"Core inflation declined due to a drop in the cost of services such education, health, transport to 3.9% in June from 4.5% for the period under review," Mukiza said.

However, month on month, headline inflation declined to -0.6% in June from the 0.6%recorded in May.

In Government securities market, BOU announced the resumption of auctions after a prolonged break, with the 1st auction of the new fiscal year due on 5th July 2017.

“In international currency markets, the dollar trading was mixed as investors fine-tuned positions ahead of the 4th July long holiday weekend, while the British sterling surged to a three week high on comments attributed to Bank of England that there is a likely need to raise interest rates in the coming months,” Kaboyo said.

Regionally, the unit traded at 34.62 buying and 34.72 selling to the Kenyan shilling; and 1.6/ 1.61 buying and selling respectively to the Tanzanian shilling.

Furthermore, Ugandan shilling traded to the Rwanda Francs at 24.243/4.254, and 2.116/2.122 to the Burundi Francs buying and selling respectively.

 

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