In the foreign exchange market, the Uganda shilling traded flat as activity remained lull. A bit of inflows were seen from commodity exporters.
The trading range held between 3665/75 levels.
In other economic news Bank of Uganda (BOU) retained the Central Bank rate at 10% citing uncertainty in the economic outlook and sticky prices.
In the regional currencies, the Kenya shilling hit a new low undermined by general increase in demand for dollars mainly from oil importers. The trading range was 124.73/125.08
In the fixed income market, BOU conducted the bond switch auction, the first of its kind and magnitude, across the entire long term yield curve. Results indicate that there was more appetite at the 3-year curve with investors demanding higher premium on the longer bonds. In total 700billion value of bonds were converted. In technical terms BOU succeeded in mitigating the rollover risk at each maturity point.
In the global markets, the US dollar held flat to marginally higher as investors paused selling the currency after the Fed Reserve did not significantly change the interest rate outlook despite a robust US job report.
Shilling forecast: Outlook is tilted slightly towards the downside as the weakening trend is expected to resume in the coming weeks on account of general increase in demand for dollars.
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