The Uganda shilling gained on the back of improved supply of the dollars mainly from commodity exporters and non-government agencies against thin demand.
The Central Bank liquidity mop ups also played a big part to drive the shilling back through the support level of 3600 on the buy side.
Trading was in the range of 3580/3600. In the money market, overnight and 1 week rates were at 10% and 12% respectively.
In fixed income market, 95 billion was on offer for the treasury bill auction. Yields came out at 10.403%, 11.486% and 13.351% for 91, 182 and 364 days.
In international currency markets, the US dollar steadied against other major currencies after it came clear that the rapid normalization is off the table, following the Federal Reserve cautious signal regarding the interest scenario in the US.
In commodities market, oil price plunged by about 5% after OPEC’s decision to extend production fell short of market expectations. A barrel traded at USD 51.44.
In the coming days the shilling is likely to remain firm holding on its gains. Market demand is expected to remain low against end month improved supply of dollars.
The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates call: 0414-580619, 0392-612648