The Uganda shilling extended its gains on sustained flows mainly from remittances against thin demand. The unit traded within the range of 3560/70.
In the fixed income, the Treasury bill auction was oversubscribed with high bid to cover ratios of 2.81, 1.84 and 1.37. Yields slightly dropped across the short end of the yield curve and traded at 6.501%, 8.5% and 10.45% respectively.
In the global markets, the dollar, euro and sterling stabilized on the hopes that some Covid vaccines might be able to neutralize Omicron variant. As a result, markets focus shifted again to the likely moves by the key Central Banks with respect to their monetary policies going forward.
In African markets, Zambia and Uganda traded steady and were likely to maintain the same stance while Nigeria and Kenyan currencies were on the back foot. On the overall the main factor to watch the Omicron variant triggering volatility in the global risk appetite potentially placing pressure on riskier currencies.
Outlook on the local front, suggest that shilling is likely to trade slightly with an upward bias riding on sustained flows ahead of the festive season with the Central bank policy in focus.
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