At the close of the trading week ending 26th April 2019, the shilling showed signs of weakness, undercut by an upsurge in demand from the interbank and corporate sector.
Trading was in the range of 3740/50 compared to the opening levels of 3725/35. In the interbank money market, overnight funds were priced at an average of 6%, while one week traded at 9%.
In the fixed income market, a Treasury bill auction with 175 billion on offer was held. Yields came out as 9.501%, 10.546% and 11.547% for 91, 182 and 364 day paper respectively. 91 day tenor was undersubscribed while the other tenors were oversubscribed.
In the regional currencies, trading was mixed. The Kenya shilling weakened due to dollar demand from the energy sector and excess liquidity in money market. Some inflows from horticulture exports trickled in but were not significant to match the demand. Trading was in the range of 101.50/70. In other currencies, the Tanzania, Zambia were holding firm and were expected to strengthen in the coming week, while the outlook for the Nigerian Naira was pointing towards weakening.
In the global markets, the greenback retreated ahead of the keenly awaited first quarter US GDP data. The dollar index which measures the US currency against a basket of peers was down 0.1%.
“Outlook for the [Uganda] shilling indicates a mild bias towards strengthening on account of end month conversions, in a square market,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.
