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Uganda Shilling Holds Firm As Traders Keenly Watch Kenya Elections

The Uganda Shilling held firm against the US dollar supported by tepid demand from market players during the week ending 11th August 2017.

Most traders remained short on dollars while keeping an eye on political developments in Kenya and also looking out for a signal from the policy meeting that was expected later in the week.

Trading was in the range of 3590/3610.
In the inter-bank money market, overnight funds traded at 7% while 1week money was at 10%.
In the fixed income market, Bank of Uganda (BoU) conducted bond auctions with 80 billion on offer for a 3 year bond and 120billion for a 10 year.

Coupons were 13.250% and 16.000% while weighted yields came at 13.244% and 14.919% respectively. Both tenors were oversubscribed.
In international currency markets, the dollar was on the back foot as other major currencies remained bullish amidst political tensions between the US and North Korea.

“Forecast indicate that the shilling will remain flat on account of weak demand, very typical of mid month market trend where key market players will be settling mid month tax obligations,” Stephen Kaboyo, a n analyst and Managing Director at Alpha Capital Partners says.

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