Uganda shilling strengthened and registered substantial gains in what was seen as market correction after overshooting through key support levels due to sentiment related to political uncertainty in the region.
Trading was in the range of 3610/3620. In the money markets, there was a slight drop in both overnight and 1 week funds. Rates were 6% and 9.5% respectively.
In the fixed income space, Treasury bill yields continued on the downward path. 91 days traded at 8.579%, 182 day at 8.777% and 364 at 9.298%. All tenors were oversubscribed.
In the regional markets, the Kenya shilling held firm. Demand remained subdued amid tight liquidity conditions in the money markets.
In the international markets, the greenback dipped and Wall street followed in a similar trend on expectations of possible delays in the long awaited US tax reforms.
Markets took a view that delays in implementing corporate tax reforms could change the way the Federal Reserve reads the US economy and it’s behavior with respect to the conduct of monetary policy going forward.
Outlook for the shilling
the shilling is expected to strengthen marginally supported by commodity inflows that are expected to restore the balance between supply and market demand.
The unit will also gain support on account of mid-month tax payments that will keep corporate demand at bay.
The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates call: 0414-580619, 0392-612648