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Wednesday,August 05,2020 20:12 PM

Shilling remains stable

By Racheal Nabisubi

Added 24th July 2019 04:29 PM

The Uganda shilling was a bit firmer on low appetite for the greenback as most corporates were out of the market settling mid-month tax obligations.

Shilling remains stable

The Uganda shilling was a bit firmer on low appetite for the greenback as most corporates were out of the market settling mid-month tax obligations.

EXCHANGE RATES

KAMPALA - This morning, the shilling was unchanged against all traded currencies in the local foreign exchange market.

On Wednesday afternoon, the shilling was trading at 3,689/ 3,699 buying and selling respectively against the dollar, the same rate as the opening session.  It traded at 4, 611/ 4,624 on the pound, while the Euro traded at 4,140/4,151.

The Uganda shilling was a bit firmer on low appetite for the greenback as most corporates were out of the market settling mid-month tax obligations.

Stephen Kaboyo from Alpha Capital Partners said the flows from mainly the Non-Governmental Organisations (NGO) sector increased the supply of dollars in the market.

As of the end of last week, trading was in the range of 3685/3695.

In the money market, the average daily interbank lending rate for overnight and one week held at previous week levels of 7% and 10% respectively.

In the fixed income space, a treasury bill with 220 billion on offer was held.

The effective yield prices were 9.73%, 10.79%, and 11.43% respectively.  Yields marginally dropped across all tenors.

In the regional currency markets, the Kenya shilling weakened amid excess liquidity in the local money market with overnight funds trading at 2.1% dropping from 2.4% of the previous week.

In the international currency markets, the dollar dipped following remarks by the International Monetary Fund that US currency is overvalued by 6% to 12% based on near term economic fundamentals.

He added that the dollar index which tracks the greenback performance against the major currencies fell 0.1%. While in the commodities markets, gold futures traded higher, sending prices to six-year high trading at 1423.30 an ounce as the dollar weakened.

"Forecast suggests no discernible long term trend insight. Shilling is expected to stay range-bound as market activity remains balanced," Kaboyo said.

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