Shilling likely to remain shaky

By Racheal Nabisubi

The Shilling has been trading in the range of 3375/3395

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The Uganda Shilling was on the back foot early this week as demand surged mainly from interbank and some corporates. The end month and portfolio conversions were not significant to offer solid support.

The interbank is where banks trade different currencies.

The currency later on gained stability supported by Central Bank open market operations. The Shilling was trading in the range of 3375/3395.

In the government securities market, Bank of Uganda (BOU) offered sh165b in the Treasury Bill auction.

Yields continued on the downward trend across all tenures, coming off at 13.431%, 14.901% and 15.804% for 91, 182, and 364 days respectively. 

Stephen Kaboyo the CEO of Alpha Capital Partners said the Central Bank took advantage of the lower rates and took up sh431b way above the amount on offer. The market was skewed towards the long end of the curve.

"In international market, the dollar performed strongly against other major currencies on the back of US positive data that indicated consumer confidence had jumped in September boosting optimism over the strength of the economy," Kaboyo said.

He noted that the pound sterling dipped following comments by the Bank of England that the UK may require a stimulus once the full effects of the Brexit sink in.

"In the coming week, the shilling is likely to remain on shaky ground on expected uptick in demand as players get back into the market. This is likely to gain speed down the road as Christmas importation cycle kicks in," Kaboyo added.