Shilling recovers from post-Brexit slump

Following the UK voting to leave European Union (EU) the Uganda Shilling has recovered from the post-Brexit sell off as panic buying of dollars died down following the Central Bank's intervention.

Stephen Kaboyo of Alpha Capital Markets said the unit stabilized having established 3400 as the new support level.  The money market was awash with liquidity following government injections.

However, the Central Bank was aggressive on the mopping side.

In the international currency markets, Kaboyo added that the British Pound continued to wobble amid fresh political developments and after Bank of England said that the economic outlook of the UK had deteriorated following its decision to quit the EU.

"The dollar continued its upward trajectory as haven assets continued to gain," he said.

Kaboyo explained that the shilling indicates a range bound unit as most market players settle end of year tax obligations.

End month inflows are also expected to offer some support in a short trading week with the Eid holiday in the middle.