Shilling holds firm as most traders remained short on dollars

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The Uganda shilling held firm supported by tepid demand from market players. Most traders remained short on dollars while keeping an eye on political developments in Kenya and also looking out for a signal from the policy meeting that was expected later in the week. Trading was in the range of 3590/3610.

In the interbank money market, overnight funds traded at 7% while 1week money was at 10%.In the fixed income market, BOU conducted bond auctions with 80 billion on offer for a 3-year bond and 120billion for a 10 year.
Coupons were 13.250% and 16.000% while weighted yields came at 13.244% and 14.919% respectively. Both tenors were oversubscribed.

In international currency markets, the dollar was on the back foot as other major currencies remained bullish amidst political tensions between the US and North Korea.

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Forecast indicate that the shilling will remain flat on account of weak demand, very typical of mid-month market trend where key market players will be settling mid-month tax obligations.

The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates call: 0414-580619, 0392-612648

READ: Shilling forecast point to mild weakening

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