Bank of Uganda conducted a treasury bill auction and 165 billion was on offer
The Uganda shilling has maintained a stable stance, supported by end month inflows mainly from NGOs and commodities amid very low demand levels for the dollar, a report by Alpha Capital Partners' Stephen Kaboyo indicates.
Kaboyo noted that the shilling was trading in the range of 3585/3595 buying and selling respectively on average last week. Similarly, in the interbank money market, rates remained stable with overnight funds trading at 7% and one week money at 10%, holding at the previous week's level.
In the fixed income market, Bank of Uganda conducted a treasury bill auction and 165 billion was on offer. Yields dropped slightly to 9.455%, 9.882%and 11.022% for 91, 182 and 364 days.
In regional currencies, the Kenya shilling strengthened to a five month high to trade at 102.85/103.05 supported by portfolio flows into the bond and equity markets.
In international currency markets, the US dollar recovered from its long running weakness attributed to the gridlock in Washington and the geopolitical uncertainties.
"The real test however was the expected from the August job report that was seen as a potential catalyst that could revive the sliding dollar or clear the way for further weakness," Kaboyo said, adding that the outlook for the shilling shows that the local unit is likely to remain in the bond range with no game changer on the horizon.
At the close of business on Tuesday, the shilling was trading at 3,594.7/ 3,604.75 buying and selling respectively according to Bank of Uganda data. This was slightly stronger than 3,595.06/3,605.06 at the close of business on Monday.