Ugandan Shilling weakens

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The Uganda Shilling held steady against the dollar last week as demand and supply remained balanced.

The absence of strong corporate demand over the past few weeks provided an opportunity for Bank of Uganda to purchase dollars for their reserve build up.

On Wednesday, commercial banks quoted the shilling at 3,600/3,610 compared to Tuesday’s close of 3,599/3,609 buying and selling respectively.

Eddy Kasirye a businesswoman from Mukono said that the Shilling weakened against the dollar and other currencies due to high demand from firms to meet their end of month tax obligations.

Stephen Kaboyo of Alpha Capital Markets said in the international currency markets, the US Dollar faltered as markets remained nervous on the new economic agenda of Trump administration as well the cautious Federal Reserve commentary.

“Outlook points to a range bound Shilling as end month inflows are likely to provide some level of support,” he added.

He further added that in commodities market, oil prices recovered, but the market remained under pressure on US inventories and rising output, as these factors were seen to undermine OPEC efforts to control production.

In the fixed income market, a 3 year bond fetched a coupon of 18.625% and a yield of 15.084%, 60 billion was on offer.

The 15 year bond coupon was 16.375% and the yield declined to 16.388 from 17.185% with 100 billion on offer.

Both bonds were oversubscribed.

© Newvision

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