The Uganda shilling remained stable as demand was dented by mid month tax payments that kept corporates out of the market during the week ending August 14, 2020. Bid and ask held at 3670/80.
In the fixed income market, relatively good yields continued to lure both local and foreign investors as seen in the uptake where over 400billion was tendered against an offer of 245 billion. Bidding remained competitive, resulting into the flatness of the yield curve. Money market yields printed at 8.336% , 9.953% and 10.246% for 91, 182 and 364 days respectively.
In the regional currencies, the Kenya shilling hit headwinds, as demand surged mainly from importers. Markets were expecting some reprieve in the coming week as commercial banks begin a new reserve maintenance cycle. In Tanzania, the shilling remained relatively stable supported by sizable in flows from agriculture and tourism sectors.
In the global markets, the US dollar slid against the major currencies such as the Euro, Swiss franc and Sterling weighed down by impasse in the US Congress about additional stimulus to help cope with Covid 19
In commodities, oil prices eased after IEA lowered 2020 oil demand forecasts due to unprecedented travel restrictions but the resilience in equity markets and a weak dollar limited the losses.
“Outlook for the local currency indicate that there will be little forward momentum as market is expected to remain calm holding at the current levels primarily because of low corporate demand,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.