Forecast for shilling indicate a range bound

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By Stephen Kaboyo

The Uganda shilling was a notch stronger supported by interbank unwinding long positions coupled with improved inflows primarily on account of portfolio flows.
Trading was in the range of 3755/3765. In the interbank money market, overnight funds traded at 8% while one week funds were at 8.5%.



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In the fixed income space, there was no primary auction. Trading activity was concentrated in the secondary market.
In the regional currency markets, the Kenya shilling held steady and traded in a narrow range with inflows from remittances and portfolio investors evenly matching the demand from importers. Trading was in the range of 100.90/101.00.



In the international markets, the US dollar rose to a week high against the major currencies supported by hawkish minutes of the September minutes of the Federal Reserve which showed that the Fed officials are largely united on the need to raise borrowing costs further.
Forecast indicate a range bound shilling, with no significant moves on both sides of the market. Supply will largely depend on end month flows that are expected to match the anticipated pockets of demand mainly from importers.

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