The Uganda shilling weakened as the lingering political events triggered a negative sentiment that led to building dollar positions by market players. Trading was in the range of 3750/60 during the week ending August 24, 2018.
In the interbank money market, rates held steady to trade at 6% and 9% for overnight and one week respectively. While in the fixed income there was no treasury auction.
Trading was confined to the secondary market.
The next scheduled auction will target Shs 170 billion.
In the regional markets, the Kenya shilling was on shaky ground undermined by an uptick in demand mainly from oil importers and the manufacturing sector.
In international currency, the greenback was bouyant, extending its surge to a 2 week high as markets shifted focus from the US-China talks to the comments that were expected from the Federal Reserve Chairman, that were due to shed light and provide fresh clues on the direction of the US monetary policy.
“Forecast for the shilling indicate a stable unit as political tensions ease and end month NGO conversions and export flows improve the supply side. Markets expect supply and demand to be evenly matched,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.