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Shilling Weakens On The Back Of High Corporate Demand

The Uganda shilling weakened as the week came to an end, shedding off most of its gains, undermined by corporate and interbank demand during the week ending 23rd February 2018. Trading was in the range of 3650/3660.

In the money markets, overnight funds traded at 8% while one week traded at 9.50%.

In fixed income market, the bond yields continued on the turn around with a 2 year coming out at 11.049% and a 15 year at 14.432%. BOU accepted Shs176.7billion against a target of 200billion.

In the regional markets, the Kenya shilling depreciated as demand picked up mainly from corporate players, trading at an average of 101.50. The shilling will likely remain on the edge after it emerged that the IMF stopped the access to the USD 1.5 billion, the precautionary facility, seven months ago. The facility was seen as a stabilizer to economic shocks.

In international markets, the US dollar edged up, trimming its earlier losses as global investors moved back into riskier assists amid rapidly shifting US monetary policy stance.

“Outlook suggests a range bound shilling as month end flows are likely to balance out demand and keep the market within the prevailing levels,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.

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Taddewo William Senyonyi
https://www.facebook.com/senyonyi.taddewo
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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