By Stephen Kaboyo
The Shillings opened strong against the US Dollar as markets adjusted to the Bank of Uganda Central Bank rate(CBR) action. The shilling threatened to breach the Ugx. 3500 support level in the early part of the week as demand for forex had completely fizzled out.
Market expectation that forex supply would improve on account of portfolio flows also lent some support. Mid week the Shilling surrendered some ground as demand rebounded strongly taking it back to levels of Ugx. 3570/90, seen a week before.
In the government securities markets, all Treasury bill tenures were oversubscribed for the first time this year. The rates were generally flat coming out at 21.2%, 22.9% and 23.86% respectively.
In the international markets, the US Fed kept the rate unchanged at the conclusion of their two day meeting indicating that they will continue to assess progress both realized and expected towards the objective of maximum employment and 2% inflation target. All eyes are now glued at the next Fed meeting scheduled for 15th and 16th December.
In the coming days, the shilling will continue gyrating within a wide range, trading in bearish territory, as end month forex demand weighs in.
The writer works with Alpha Capital Partners WWW.ALPHACAP.CO.UG