Uganda shilling held firm amid subdued demand

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The Uganda shilling held firm amid subdued demand as most corporates stayed out of the market on account of mid-month tax payments. Trading was in the range of 3630/3640.

In the interbank money market, there was plenty of liquidity. Bank of Uganda held larger amounts in repos in excess of 400billion while the outstanding amount in the deposit auction stood at 1.8 trillion. Overnight funds traded at 8% while 1 week money was at 9%.

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In the fixed income market, there was no primary auction, activity was restricted to the secondary market.

The Kenya shilling lost ground as inflows dwindled coupled with deterioration in the risk appetite as the Supreme Court began hearing the Presidential election petition. Trading range was in the range of 103.20/40.

In the global Markets, the greenback edged higher against the major currencies, rebounding from a three week low after the US House of Representative passed the tax overhaul bill that will affect Corporate America and households, setting the stage for the US senate consideration.
In the commodities market, oil prices continued to rally with Brent Crude touching 61.31 US dollars per barrel.

Week ahead
The shilling is likely to trade within the current range as demand is expected to remain at a low ebb as we get closer to the end of the year. Markets expect diaspora remittances to begin trickling in and likely to hit the peak in December.

READ: Shilling strengthens, registers substantial gains

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