By Stephen Kaboyo
The Uganda shilling recouped it’s losses as demand from importers waned amid tight liquidity conditions.
Trading was in the range 3850/3860. In the interbank money market rates, overnight rates traded at 6% and one week traded at 9% respectively.
In the fixed income market, Bank of Uganda held the first single price auction. Yields remained unchanged from the last auction. Out of 170 billion on offer only 120.3 billion was accepted.
In the regional currency markets, the Kenya shilling strengthened against the dollar on account of strong inflows mainly from remittances from Kenyan’s living abroad and portfolio flows. Trading was in the range of 100.65/85.
In the international currency markets, the US dollar remained firm against other major currencies, with investors taking shelter in US assets as risks of a global trade war intensify. The dollar was well-bid as a safety bet. So far this year, the dollar has gained about 3%.
Outlook indicate that the shilling will remain range bound in the coming sessions. Domestic demand conditions will dictate the further course of the market in the near term.