After a turbulent week, the local currency recouped some of its losses on account of receding dollar demand rising hopes that a torrent of selling risk assets may have run its course.
The shilling pulled back, crossing the support level of 3900, to trade at 3870/3880 at the close of the week compared to opening levels of 3980/3990.
In the fixed income segment of the market, a treasury bill auction with amount of 225 billion on offer . Yields marginally edged up on the 91 day and 182 day tenor, to trade at 9.249%,10.751%.
The biggest increase was seen on the one year curve that jumped about 100 basis points to trade at 14.000%.
Due to tight liquidity conditions, there was undersubscription on the 182 day, while the other tenors registers lower than usual take up.
In the regional markets, the Kenya shilling followed a similar trend like its Uganda counterpart, strengthening as demand took a nose dive.
Trading was in the range of 105.80/106.00.
In the global markets the US dollar pulled back as panic selling eased. A series of stimulus measures including the US package of 2.2 trillion and the G20 initiative of 5 trillion, helped temper a rout in the global markets.
In other economic news, the long awaited US jobs data showed unprecedented rise in US jobless claims hitting a 3 million mark, a highest record in recent history, underscoring the devastating impact of the COVID-19 on the US economy.
outlook for the shilling
”In coming week, the shilling is likely to hold at the current levels as easing dollar funding conditions help to reduce the demand for the greenback and anxiety cools off.” says Stepehen Kaboyo, the Alpha Capital Markets boss
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