Shilling trades flat, finds a comfort level with no demand pressures expected

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By Stephen Kaboyo

The Uganda shilling traded flat as demand and supply conditions remained even. Trading was in the range of 3695/3705.

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In the interbank shilling market, overnight funds traded at an average of 7% while one week funds quoted at 10%, a slight indication of emerging tightness of liquidity.

In the fixed income market, a Treasury bill auction with amount of 220 billion on offer was held.

Yields edge up across all tenors, printing at 9.527%, 10.666% and 11.600%. The auction was oversubscribed.

In the regional currency markets the Kenya shilling mildly appreciated as market players were unwinding long positions amid reduced demand.

The unit traded in the range of 102.15/35. In the Tanzanian market, the shilling held firm supported by inflows mainly from agriculture and mining sectors. Trading was in the range of 2293/2303.

In the international currency markets, the greenback was stable as markets held off making big bets ahead of a closely watched US nonfarm jobs report that was expected to influence the course of near term Federal Reserve monetary policy.

Forecast for the shilling indicate a range bound unit, holding ground having seemingly found a comfort level at around 3700, with no demand pressures expected

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