Uganda Shilling held firm against the Dollar

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The Uganda Shilling held firm in a short trading week with markets expecting a knee jerk reaction following Bank ‘s rate cut that was likely to stimulate demand for forex.

The Bank of Uganda, cut its benchmark rate by 50bps to 11%, citing dismal growth in the first two quarters of the fiscal year that gave a bleaker view of the economy.

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Trading was in the range of 3600/3610. In the money market, overnight rates averaged 10% while 1 week was 12%.

In fixed income market, yields dropped across all tenors, trading at 10.112%,11.656% and 13.809% for 91,182 and 364 day treasury bills.

In international currency markets, the dollar lost ground against major currencies following US President Trump remarks to Wall Street Journal that the US dollar has kept a bullish tone and is too strong and that his preference would be to keep interest rates low in the US.

Outlook point to mild weakening of the shilling as pockets of demand are expected to emerge as markets open after a long Easter weekend.

The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates call: 0414-580619, 0757 450832, 0392-612648

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