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Tuesday,November 24,2020 23:13 PM

Shilling steady as demand and supply match

By Samuel Sanya

Added 28th October 2020 03:03 PM

Money markets were liquid with overnight at an average of 6.25%. Bank of Uganda will hold a 2-year and 10-year Treasury bond auction on Wednesday.

Shilling steady as demand and supply match

The Uganda shilling opened the week at levels of 3725/3735 during a day of quiet trading

Money markets were liquid with overnight at an average of 6.25%. Bank of Uganda will hold a 2-year and 10-year Treasury bond auction on Wednesday.

The Uganda shilling opened the week at levels of 3725/3735 during a day of quiet trading on Monday, an Absa bank report indicates.  

Catherine Kijjaggulwe, the Absa Bank head of trading said that month-end flows from NGOs and other sectors trickled in and balanced the corporate demand and the expectation is for the currency to remain with the 3700 - 3750 trading range for the week. 

Money markets were liquid with overnight at an average of 6.25%. Bank of Uganda will hold a 2-year and 10-year Treasury bond auction on Wednesday.  

"The secondary market for government securities has seen yields edge upward especially in the back-end Treasury Bonds as market sentiment starts to factor in likely increased domestic borrowing due to the fiscal funding requirement in the recently tabled supplementary budget," Kijjaggulwe.  

The Kenya shilling continued to trade above the 110.00 level closing the day on Monday at 110.35/110.65. Continued demand from the energy and maize milling sector outweighed inflows from the tea exporters and the outlook is for the Kenya shilling to continue trading within the 110.00 - 110.90 range for the week. 

The overall market sentiment remains weighed down by the rapidly rising coronavirus cases globally, with major European economies contemplating nationwide lockdowns once again, as they struggle to contain the second wave of the virus. Also, fading chances for US stimulus and election uncertainty are dragging down the currencies. 

GBP/USD remains under pressure above 1.30 as rising UK COVID-19 cases, uncertainty about Brexit and PM Johnson's political problems weigh on the Sterling.  

Oil prices fell sharply, on expectations that Libya will ramp up oil production while the coronavirus restrictions will hold back economic activity and lead to lower demand globally. Brent crude is down $1.29 at $40.48 a barrel, a 3.09% drop, while US crude has lost 3.36% to $38.51 a barrel.

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