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Shilling weakens against the dollar

Shilling weakens against the dollar

KAMPALA – The Uganda shilling traded stable supported by portfolio and commodity flows as demand remained muted in a short trading week ahead of a long Easter weekend, reads Alpha Capital Markets report.

Trading was in the range of 3730/3740. In the money market, the average inter-bank lending rates held at 7% and 10% for overnight and one-week funds.

In the fixed income space, a 15 year with a coupon rate of 14.375% and three year bond with a coupon of 11%, were reopened. Amount on offer was 80 billion and 120 billion for the two tenors. Yields came out at 13.875% and 15.850% respectively.

Furthermore, in the regional markets, the Kenya shilling weakened, undermined by the dollar demand mainly from importers and the excess liquidity in the money market. Trading was in the range of 101.00/20. 

The Tanzania shilling remained stable, propped up by inflows from tourism and mining sectors. The unit held in the range of 2310/2320.

“Forecast for the shilling indicate a range bound unit with a bias towards a mild depreciation as players anticipate pockets of demand to emerge as markets open after a long holiday weekend,” Stephen Kaboyo, a financial and market analyst said.

However, by the opening session on Tuesday, April 23, 2019, Forex bureaus in Kampala quoted the shilling to be trading at 3,732.79/ 3,742.79 buying and selling respectively.

This shows that the local unit slightly weakened by an average of sh5 against the dollar compared to 3,727/3,737 that was recorded at the close of business on Holy Thursday.

The report also indicates that in the global markets, the dollar index against a basket of six major currencies remained flat with the greenback inching down 0.1% amid a bounce in US Treasury yields, while the commodity-linked currencies sagged after the rally in oil prices ran out of steam. A barrel of oil traded at $63.50.

[source: https://www.newvision.co.ug/new_vision/news/1499030/shilling-weakens-dollar]

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