Uganda shilling slightly stronger

 

 

As the trading last week drew to a close, the unit was holding steady on lackluster demand, backed up by improved flows from portfolio investors, Stephen Kaboyo of Alpha Capital Markets said.

 

Trading was in the range of 3760/3770.

 

By the close of business on Wednesday, the shilling was quoted trading at 3,754/3,764, slightly stronger than the opening session of 3,755/ 3,765 buying and selling respectively.

 

In the interbank money market, overnight night funds were quoted at 6% while one week funds traded at an average of 9%.

 

In the fixed income space, a Treasury bill auction with 175 billion on offer was held. There was a marginal drop in the yield of the 91 days to 8.478% while the 182 and 364-day yields edged up a bit to trade at 10.666% and 11.498%.

 

Alpha Capital Partners report indicates that the bid to cover ratio was 2.336, significantly higher than the 182 at 1.165 and 364 at 1.593.

 

The report adds that this was an indication that markets had taken a view that interest rates are likely to rise in the short term and their investment preference is on the short end of the curve.

 

"Outlook for the shilling in the coming week indicates a range bound unit with both the demand and supply side evenly matched as end month dynamics come into play," Kaboyo said.

 

He, however, added that as these effects wear off; it is likely that shilling will trade in bearish territory.

 

In the regional currency markets, the Kenya shilling weakened due to increased end-month demand from oil and merchandise importers. Trading was in the range of 101.20/40.

 

In the global markets, the US Federal Reserve monetary policy stance boosted the dollar following the release of the Fed minutes that indicated the current patient approach could remain in place for some time, a further sign that policymakers see no need to change rates in either direction amid a raft of global uncertainties.