Wednesday, October 17, 2018
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End Of Month Inflows From Charities Boosts Shilling

The Uganda shilling was relatively stable supported by end month flows from charities amid subdued demand during the week ending 3rd July 2018. Trading was the range of 3690/3700.
In the interbank money market, overnight funds traded at 6% while one week traded at 9%.

In fixed income market, Shs 170 billion was on offer for the treasury bill auction. Yield on the 91 day edged up slightly by 23 basis points  to trade at 10.352% while the 182 and 364 day dropped to trade at 11.659% and 14.999% respectively. A few outlier bids were rejected.

In the regional currency markets, the Kenya shilling held steady helped by inflows mainly from remittances and coffee exports. Liquidity remained tight in money market. Trading was in the range of 100.35/55.

In international markets , the US dollar firmed against the major currencies and hit a 14 month high with markets gripped by worries over the escalating trade tensions between the US and China.

The markets reacted by placing the US as the winner and China as the loser, given that the US imports far more from China, than China does from the United States.

“Outlook for the shilling in the coming week indicate sideways trading, with the currency remaining within the current levels, with neither bulls or bears taking control as decent flows spill over and continue to match the market demand,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.

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