The Uganda shilling held steady against the dollar during the week closing at 3720. Demand remained subdued across all counters.
In the Kenyan market, the currency weakened to a fresh low as month end demand outweighed supply. The unit was quoted at 138.1.
In the fixed income market, the treasury bills yields were flat as BOU deliberately clamped on bids that were are out their tolerance levels. The market was pushed towards the long end where the issuer took up more than was on offer, a move meant to mitigate rollover risk. Yields printed at 10.002, 10.240 and 11.700% respectively.
Globally, markets continued to fret about the U.S debt ceiling limitation and lack of action so far. A bit of anxiety hovered over the markets, with the dollar easing against its major peers. Markets priced in the likelihood of the US interest rates remaining high in the near future.
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Looking ahead, the local focus will be on inflation numbers, June MPC, and the budget pronouncements. On the other hand fiscal pressures remain a major concern, and collectively all key factors are negative for the shilling and therefore sustained stability may not be guaranteed.
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