Shilling stable as diaspora remittances flow in
Dec 04, 2018
Uganda received $1.2b (about sh4.5trillion) in 2017 in remittances, accounting for 5% of the country’s Gross Domestic Product (GDP), according to a report by World Remit.
The shilling was trading between 3,721/3,731 buying and selling respectively at mid-day on Tuesday, nearly unchanged from 3,720/3,730 per dollar at the close of business on Monday.
Stephen Kaboyo, the CEO of Alpha Capital Partners noted that the shilling has held firm for the last two straight weeks due to subdued demand for the greenback in the interbank market.
Last week, 2 and 5-year bond auctions were held resulting in yields to maturity of 15.25% and 16.75% respectively with both tenors oversubscribed. In the regional currency markets, the Kenya shilling was stable, supported by decent flows from remittances and receipts from horticulture exports.
Trading was in the range of 102.30/50. In the international currency markets, the US dollar was up amidst anxiety from trade tensions in favour of the greenback while investors had one eye on the US interest rates announcement.
"Outlook for the shilling points to a stable currency with a greater chance of strengthening as the end of month conversions set in against very thin demand. Market expectation of increased seasonal remittances will play in support," Kaboyo said.
Uganda received $1.2b (about sh4.5trillion) in 2017 in remittances, accounting for 5% of the country's Gross Domestic Product (GDP), according to a report by World Remit.
The report noted that remittances are likely to increase by 4.1% in 2018, improving on the country's economy.
A remittance is a transfer of money by a foreign worker to an individual in their home country.