Shilling trades flat against the dollar amid subdued demand

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By: Stephen Kaboyo

The local currency traded flat against the dollar amid subdued demand. Supply was enhanced by commodity flows and energy investors taking party in early oil investments in the country.
Trading held in the range of 3670/80.

In major African markets, Kenya and Zambian currencies traded weak on limited supply of dollars against strong demand, while Nigeria, Tanzania and Ghanaian currencies held steady.

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In the treasuries market, yields remained flat across board as BOU eliminated outlier bids and only raised 118 billion out 215 offered. In other market developments BOU announced a Bond switch auction to be held on February 8th targeting maturities of 13th April 2023 in what is seen as managing debt service that is likely to put pressure on government finances and could result in settlement risk.

In the global currencies, the dollar sunk against other major currencies as markets interpreted the Fed move as dovish tilt despite the 25bps hike. The Fed reiterated that rates are likely to go higher with minimal chance of cutting rates this year.

Outlook for the shilling suggest a stable range underpinned by sizable inflows against sagging market demand.

Alpha Capital Forex Bureau: For competitive Forex Rates VISIT Plot 12 KAMPALA ROAD-CHAM TOWERS SUITE 43: call: 0414-580619, 0392-612648

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