Sunday, May 26, 2024
Home > Markets > Currencies > Shilling Weakens As Uganda Reopens Entry Points

Shilling Weakens As Uganda Reopens Entry Points

The Uganda shilling tumbled to trade near a two month low undermined by a surge in corporate and importer demand as the country opened up its entry points.

At the counters the local currency quoted at 3715/3725.

In the fixed income market, the yields on 5 and 15 year bonds held at 14.900% and 15.000% respectively. Uganda government bonds continue to offer attractive return relative to inflation which is currently under 5%. Outlook indicate stickiness of yields in the very short term, but not likely to go significantly lower given the government funding requirements.

In the regional markets, the Kenya shilling held its ground after the Central Bank held its benchmarks rate for the 4th time, indicating that previous policy measures were beginning to bear fruit. The currency traded at 108.40/60.

At the global scene, the US dollar rose and made its sharpest jump in more than a month after US President Trump said he had tested positive for COVID 19 just a month ahead of the November 3rd election. The surprise news were likely to cause a new wave of market volatility heading to election.
In reaction, markets went into a de-risking mode with the Euro falling 0.2% against the dollar, Commodities and US stocks also tumbled while British sterling already battered by Brexit turmoil also sank.

“In the coming weeks, the shilling is likely to remain bearish on account of pent up demand as import activity picks up,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.

Taddewo William Senyonyi
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

Leave a Reply

Your email address will not be published. Required fields are marked *