Shilling Trades Firm Against Dollar On Improved Supply Conditions In The Market

The local currency traded unchanged, holding firm for most of the trading sessions on the back of offshore portfolio flows that improved supply conditions in the market. Bid and ask for the shilling was at 3683/93.

In the fixed income market, yields on government bonds of 2 and 5 year printed at 13.80% and 15.35% with pre determined coupons of 11.000%and 16.625%.

Regional currencies kept a similar trend as their UGX peer, with the Kenya currency holding firm, supported by flows targeting the debt market. Trading was in range of 107.85/108.05. Tanzania shilling traded at 2315/2325.

In the global markets, the dollar nursed losses against the major currencies ahead of the US no farm payroll reports which investors feared could reinforce the view that momentum in the world largest economy is slowing. Other factors that contributed to the negative sentiment were the rising Covid 19 infections and the steady decline in US treasury yields.

“Going forward, shilling is shaping up for yet another stable week with potential of a marginal appreciation ahead of an upcoming monetary policy announcement. Markets have taken a sanguine view that MPC will likely stand pat,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.