The Uganda shilling remained broadly stable as market players focused on settling mid month tax obligation during the week ending 15th February 2019.
Demand was dull with trading confined in the range of 3665/3675, hardly unchanged from the opening session of the week.
In the interbank money market, overnight funds traded at 7% for overnight and 10% for one week funds.
In the fixed income market, a Treasury bill auction with 220 billion on offer was held. Yields slightly dropped to print at 9.50%, 11.00% and 11.51% with bid to cover ratios of 2.30, 2.97 and 2.60.
In the regional currency markets, the Kenya shilling held its ground, mainly supported by offshore flows into the government debt market. Trading was in the range of 100.10/30.
In the global markets, the US dollar was wobbly on dismal US retail sales, the biggest drop in nine years suggesting a sharp economic slowdown. On the other hand markets were keenly following the US -China trade talks and political developments relating to the declaration of the national emergency for the border wall with the outcomes likely to determine the short term direction of the currency.
According to Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners, “Outlook for the [Uganda] shilling indicates range bound trading on tepid demand.”
