Shilling stabilizes after elevated dollar demand

The Uganda Shilling weakened slightly on account of elevated demand from energy and manufacturing sectors but stabilized at close of the previous week as demand waned. 

The shilling trade in the range of 3610/3620 buying and selling respectively. 

In the first trading session on Monday, the Shilling was quoted at 3,609.58/3,619.58 by Bank of Uganda much stronger than the previous week's close.  

In the fixed income market, BoU offered 170 billion in the treasury bill auction. Yields slightly edged down to trade at 9.539%, 9.988%, 11.152% in the 91, 182 and 364 day respectively. The auction was oversubscribed in all tenors. 

Alpha Capital Partners Stephen Kaboyo noted that the dollar was wobbly in the international currency markets as traders remained uncertain on the future direction of interest rates in the US. The dollar later strengthened on the back of stronger job growth figures. 

In the commodities markets, oil price dipped and traded below the $50 mark mainly on the rising US output. 

"In the coming days, it is likely to be a range bound market for the shilling, with elections in the two major Uganda's trading partners looming. The regional political developments will be a key factor to watch," Kaboyo said.