Uganda Shilling Rebounds From Lost Ground

The Uganda shilling lost ground earlier in the week on account of elevated demand from energy firms, manufacturing and importers.

However, mid-week the unit stabilized on receding demand and traded in the range of 3700/3710 during the week ending 15th March 2019.

 In interbank money markets, overnight funds traded at 7% while one week funds traded at 10%.

In the fixed income space, a primary Treasury bill auction was held with 220 billion on the tap. Yields generally remained flat apart from the 364 day that edged up by 100 basis points to trade at 12.500% while 91 and 182 day were at 9.749% and 10.713% respectively.

In the regional currency markets, the Kenya shilling weakened, reversing its previous gains due to significant dollar demand mainly from importers. Trading was in the range of 100.05/25.

In the global markets, the US dollar pulled ahead from a nine day low largely helped by the pound snapping back after a sharp rally that was driven by Brexit political developments.  Earlier the greenback had taken a knock on soft US economic data.

“Outlook indicates that [the Uganda] shilling will likely hover around the current levels as mid -month market dynamics limit the demand for dollars,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.