Demand for dollars bore down on the shilling after the local unit had strengthened.
The shilling declined in the first trading session of the last week of January, trading at 3,588.88/3,598.88 buying and selling respectively according to Bank of Uganda data, this was a slight decline from 3,588.14/3,598.14 on Friday.
Demand for dollars bore down on the shilling after the local unit had strengthened following a Treasury bond auction to trade in the 3580/3590 range last week.
Stephen Kaboyo, the CEO Alpha Capital Partners, noted that there was a significant inflow of hard currency to take advantage of a Treasury bond auction, where a total of sh160b was offered for 2 and 5 year reopening.
Coupons were 18.625% and 16.750% while yields were 15.071% and 16.088% respectively.
In the international currency markets, the dollar retreated as markets remained uncertain on Trump administration economic plan and the aggressiveness of renegotiating US trade pacts with Canada and Mexico.
"Outlook for the shilling indicate a stable shilling, holding at the current levels as end month flows render some support against muted demand," Kaboyo pointed out.