Shilling expected to remain stable in a well paired market

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16th September 2016

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The Uganda shilling traded sideways during the week. Demand was on and off as the corporate market focused on mid month tax obligations. Trading was in the range of 3370/3380. The Bank Of Uganda  large repo operations also helped  to keep pressure at bay.
In the government securities market, Bank Of Uganda held a treasury bill auction, 165 billion was on offer. Yields fell across all tenures to 13,576%, 15,095% 16.249% respectively.

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Market preference was more at a longer end of the curve as market players locked in on the back of expectation that yields are likely to continue on the  downward trajectory.

In the international currency markets, the dollar slid weighed by a string of weak U.S economic data and  to an extent, the view that markets were under pricing the chances of a rate increase. The British pound wobbled as Bank of England kept monetary policy on hold but indicated that it could cut rates, if the economy remains weak.

‘ ‘Outlook for the shilling indicate a stable unit in a market that is likely to be well paired .” says Stephen Kaboyo, the Alpha Capital Markets boss

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