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Uganda Shilling Remains Relatively Stable

The Uganda Shilling was relatively stable supported by buoyant inflows on account of portfolio flows targeting the government securities market amid weak demand during the week ending 15th September 2017

Bank of Uganda open market operations also rendered some support. Trading was in the range of 3595/3605.

In the fixed income market, Shs155billion was on offer for the treasury bills. The yield on the 91 day paper went up to 9.4% while yields on the 182 and 364day dropped to 9.77% and 10.80% respectively.

The auction was oversubscribed with bid to cover ratios of 1.075, 2.270 and 2.770.

In the regional currency markets, the Kenya shilling was steady against the US dollar as the markets were in a wait and see mode awaiting the outcome of the monetary policy meeting.

In the international currency, the dollar recorded some gains riding on the back of improved yields on US Treasury bonds and comments indicating that the Trump administration is still committed to the tax reform agenda.

“In the coming week, the shilling is likely to oscillate in a narrow range with expectation of a mild rebound in corporate demand that may put a bit of pressure on the unit,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.

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