The Uganda shilling was on the back foot early in the week as demand surged mainly from interbank and some corporates.
End month and portfolio conversions were not significant to offer solid support. The currency later on gained stability supported by Bank of Uganda (BoU) open market operations. Trading range was 3375/3395.
In the government securities market, BOU offered 165 billion in the Treasury bill auction. Yields continued on the downward trend across all tenures, coming off at 13.431%, 14.901% and 15.804% for 91, 182, and 364 days respectively.
The Central Bank took advantage of the lower rates and took up 431 billion way above the amount on offer. The market was skewed towards the long end of the curve.
In international markets the dollar performed strongly against other major currencies on the back of US positive data that indicated consumer confidence had jumped in September boosting optimism over the strength of the economy.
The British sterling dipped following comments by the Bank of England that the UK may require a stimulus once the full effects of the Brexit sink in.
According to Stephen Kaboyo, the Alpha Capital Markets Boss, In the coming week, the shilling is likely to remain on shaky ground on expected uptick in demand as market players get back into the market.
‘ ‘This is likely to gain speed down the road as Xmas importation cycle kicks in.’’