The Uganda Shilling depreciated to a three month low as demand surged mainly from energy and manufacturing sectors and the interbank.
The shilling breached a key resistance level of 3400 and traded in range of 3405/3415,
In the government securities market, Bank of Uganda offered Ugx. 160billion in two and 15 year bonds.
The market was oversubscribed with yields dropping across all the tenors. Bank of Uganda will offer Ugx. 165 billion in the Treasury bill auction scheduled for 12th October 2016.
In the international markets, the US dollar traded strong against all the major currencies, drawing it’s bullish stance on the upbeat US manufacturing survey report.
The British pound was bearish as concerns over Brexit remained on the cards coupled by the strength of the dollar on the expectation of US interest rate hike.
According to Stephen Kaboyo, the Alpha Capital Markets boss, the Outlook for the shilling indicate sustained depreciation pressure as demand side market activity remains high amid low foreign exchange inflows. Panic buying is likely to set in, as the currency tests new resistance levels.