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Uganda Shilling On Back Foot As Demand For Dollars Rebounds

The Uganda shilling was on the back foot, weakening as demand rebounded mainly from market players building positions in anticipation of dividend payments during the week ending March1, 2019.

 Trading was in the range of 3665/3675.

In interbank money market, overnight funds traded at 7% while on week funds traded at 10%.

In fixed income market, a Treasury bill auction with 220 billion on offer was held. Yields remained nearly at the same levels as the previous auction, printing at 9.50%, 10.57% and 11.50% for 91, 182 and 364 days respectively. All tenors registered oversubscription.

In the regional currency markets, the Kenya shilling inched up supported by sizeable inflows from portfolio investors, Diaspora remittances and horticultural proceeds. Trading was in the range of 100.00/20.

In the global markets, the greenback scaled a 10 week high on the back of a surge in US bond yields after US GDP topped expectations. Markets were keenly following the geopolitical events for possible clues on the direction of the markets going forward.

According to Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners, “Outlook indicates that the [Uganda] shilling is likely to face some slight pressure in the coming week as sentiment on dividend payouts gather momentum.”

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