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Thursday,August 22,2019 11:31 AM

Uganda Shilling projected to weaken

By Racheal Nabisubi

Added 18th January 2019 08:52 PM

Bank of Uganda quoted the unit trading at 3,709/3719 slightly weaker than Thursday’s close of 3,707/3,717 buying and selling respectively

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Bank of Uganda quoted the unit trading at 3,709/3719 slightly weaker than Thursday’s close of 3,707/3,717 buying and selling respectively

The Uganda Shilling opened strong but ceded ground towards end of the trading week of January 18 on account of reduced inflows and a rebound in demand from the energy and manufacturing sectors during the week ending January 18, 2019, Alpha Capital markets report indicates.

Trading was in the range of 3685-3705. In the interbank money market, overnight funds traded at 7% while one week funds traded at 10%

On Friday afternoon, Bank of Uganda quoted the unit trading at 3,709/3719 slightly weaker than Thursday’s close of 3,707/3,717 buying and selling respectively.

“Forecast for the shilling indicate that the shilling is likely to come under slight pressure as demand picks up from corporate and interbank players after the seasonal  end of  year market slow down,” Stephen Kaboyo, financial expert and market analyst said.

In the fixed income market, a treasury bill auction with 220 billion on offer was held. Yields came out at 10.572%, 12.000% and 13.249% for 91, 182 and 364 day tenors respectively. The auction was oversubscribed.

Regional currency markets indicate that the Kenya Shilling recovered, clawing back its losses following the terrorist attack. Significant inflows from the diaspora and the tightening liquidity in the money market helped to support the shilling. Trading was in the range of 101.60/80.

In the international currency markets, Kaboyo added that the US Dollar was firm as growing optimism of progress in the US-Sino talks supported broader appetite for risk. In the UK, the pound sterling was on the edge following Prime Minister May’s defeat on her Brexit deal.

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