The Uganda shilling started off to a flat start amid thin demand and as markets opened for the year. Remittances flow remained the main source of supply. Trading was in the range of 3660/3670 in the week ending January 3rd 2020.
In the fixed income market, a Treasury bill auction with a target amount of 225 billion was held. Yields marginally increased across all tenors to trade at 9.683%, 11.410% and 13.653%.
The 91 and 182 day tenors were undersubscribed while the 364 day received huge subscription and bids over and above the offers amount were accepted.
In the regional markets, the Kenya shilling was on the front foot supported by inflows from Diaspora and also commercial banks trimming dollar positions as business resumed after the holidays. Trading was in the range of 100.85/101.05.
In the global markets, the dollar recovered from a six month low after downbeat December that left the greenback on a flat foot. Optimism regarding the trade dispute between the two big economies will likely keep the dollar stable in the coming weeks.
“Outlook for the (Uganda) shilling indicates a stable unit, holding at current levels as market activity gradually picks up. In the first full week of trading, market players are expected to reposition their books and that could trigger some activity but not major price trend expected,” Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners says.
