The local currency found support in a fairly stable market environment characterized by lack of vigour on the demand side against sufficient supply levels.
Trading was confined in a tight range of Ugx. 3550/60.
In the fixed income, the bond yields for the 2 and 10 year printed at 11% and 14% respectively. Bank of Uganda (BOU) mopped only 73 billion out of the 500 billion on offer.
The BOU’s action to cut off outlier bids was to signal their unwillingness to accept and lock in high interest rates that could distort the long term yield curve as government fiscal conditions remain weak.
In the global markets the US dollar edged higher in choppy trading as risk appetite improved, although markets remained nervous about the first spreading Omicron variant and the speed at which the US Fed will taper its asset purchase program.
In energy markets, oil traded just below $70 mark amid fears that the Omicron variant was likely to hurt demand going forward while OPEC kept its oil policy unchanged.
In African markets, it was generally calm with Kenya, Tanzania, Uganda, South Africa and Nigerian currencies holding steady.
On the UGX, volatility tracking remain at a month high suggesting a mild appreciation is still on the cards, largely supported by seasonal flows.
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