TOP

Uganda Shilling registers gains

By Racheal Nabisubi

Added 20th May 2019 04:08 PM

The Shilling indicates a range bound unit as market jitters related to the fiscal budget for 2019/20 build-up

Aaaaaaabig 703x422

The Shilling indicates a range bound unit as market jitters related to the fiscal budget for 2019/20 build-up

The Uganda Shilling was stable cushioned by dollars inflows as demand remained muted on corporate mid- month tax payments trading was in the range of 3765/3775, last week.

In the money market, overnight funds were priced at an average of 6% while one week was at 9%.

In the fixed income market, treasury bond auctions for 2 and 5-year bonds were held. Sh210 billion was mopped up. Yields came out at 12.85% and 15.00% respectively. Both tenors were oversubscribed with bids to cover ratios of 2.425 and 1.730, a report by Alpha Capital Partners indicates.

Stephen Kaboyo the Alpha Capital Markets CEO noted that in the regional currency markets, the Kenya Shilling strengthened due to tight liquidity conditions against subdued demand.

He said that the currency was expected to gain further as the credit reserve ratio cycle for commercial banks commences. Trading was in the range of 101.00/20.

The South African Rand strengthened on hopes of more stimuli for China’s slowing economy. Trading was at 14.32 to the USD.

At the start of the week today, Bank of Uganda quoted the Shilling trading at 3,755.08/3,765. This is stronger than Friday’s close of 3,760.11/3,770.11.

Kaboyo said the Shilling indicates a range bound unit as market jitters related to the fiscal budget for 2019/20 build-up.

“The sensitivity to new economic measures expected to be announced in the budget reading early June will keep market players with limited open positions,” he added.

In the global currencies, the US Dollar was bullish holding near a two week high supported by strong US housing data and weekly jobless claims report which pointed to sustained labour market strength.

The greenback also drew strength as its peers such as the euro and the pound were held down by bearish factors.

Related Articles

More From The Author

Related articles