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Uganda Shilling Appreciates Marginally

The Uganda shilling appreciated mildly in the last trading session of the week ending 8th  November 2019 with improved forex supply as market demand became less intense. Trading was in the range of 3695/3705.

In the interbank shilling market, overnight funds traded at an average of 6% while one week quoted at 9%.

In the fixed income space, 220 billion treasury bill auction was conducted. Yields were generally flat with a slight drop at the 91 day curve, coming out at 8.098% while 182 and 364 days were at 10.154% and 11.550%. There was less uptake on the 91 day .

In the regional currencies, the Kenya shilling was supported by off shore investors purchasing banking stocks after government lifted a cap on lending rates boosting dollar supply.

Trading was in the range of 102.25/75.

In the global markets, the US dollar gained against safe haven currencies bolstered by comments that suggested US and China were inching closer to a trade deal.

Markets had high expectations that the two economic giants would reach an agreement by end of the month given the signals that were coming from Beijing and Washington.

“Forecast for currency indicate a stable shilling with a bias towards strengthening,” Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners, says.

He adds: “Market conditions point to potentially higher dollar inflows in the coming week while mid month tax obligations will keep major market players at bay.”

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