The Uganda shilling weakened and breached the key resistance level and traded above the 3,600, driven by the surge in demand from importers and interbank. Trading was in the range of 3,620/3,630.
In interbank money market, overnight funds traded at seven percent while one-week funds traded at eight percent.
In the fixed income market, treasury bills yields continued on the downward trajectory and came out at 9.039%, 9.241% and 9.543% for 91, 182 and 364 days. The offer of 130 billion, lower than usual, was downsized due to liquidity considerations.
In the regional currency markets, the Kenya shilling was stable despite the political turmoil, largely supported by significant diaspora remittances and horticulture flows .
In international currency markets, the dollar lost ground following the release of the Federal Reserve minutes that highlighted concerns about the low inflation environment in the US.
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Shilling forecast indicate underlying depreciation pressures mainly from importers positioning for end of year imports. The demand is likely to continue playing out even as corporates stay out on account of mid-month tax payments.
The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates call: 0414-580619, 0392-612648