The Uganda shilling traded stable supported by portfolio and commodity flows as demand remained muted in a short trading week ahead of a long Easter weekend.
Trading was in the range of 3730/3740. In the money market, the average interbank lending rates held at 7% and 10% for overnight and one week funds.
In the fixed income space, a 15 year with a coupon rate of 14.375% and 3 year bond with a coupon of 11%, were reopened. Amount on offer was 80 billion and 120 billion for the two tenors. Yields came out at 13.875% and 15.850% respectively.
In the regional markets, the Kenya shilling weakened undermined by the dollar demand mainly from importers and the excess liquidity in the money market. Trading was in range of 101.oo/20. The Tanzania shilling remained stable propped up by inflows from tourism and mining sectors. The unit held in the range of 2310/2320.
In the global markets, the dollar index against a basket of six major currencies remained flat with the greenback inching down 0.1% amid a bounce in US Treasury yields, while the commodity linked currencies sagged after the rally in oil prices ran out of steam. A barrel of oil traded at USD 63.50.
“Forecast for the [Uganda] Shilling indicate a range bound unit with a bias towards a mild depreciation as players anticipate pockets of demand to emerge as markets open after a long holiday weekend,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.