Uganda shilling notes

The shilling continued to trade within a narrow range during the week opening Monday’s session at the 3780/3790 levels and trading marginally stronger at the 3770/3780 on Friday morning.

Inflows continue to trickle in from non-governmental organisations(NGOs), exporters and other sectors, with limited pockets of corporate demand as buyers watch for any further shilling strength to meet their requirements.

Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda said the unit is anticipated to maintain trading within a range in the short term buoying within the 3750 – 3830 levels. The market waits to see if inflows will remain healthy as we draw close to the year-end festivities and if the 3750 psychological level will be breached eventually.

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“Money Markets were fairly liquid during the week with overnight yields trading between the 9.00% and 11.00% levels. The mid-month tax cycle should start this week and may slightly impact the short-term Money Markets,” she said.

Bank of Uganda held a Shs285 billion Treasury Bill auction on Wednesday and the 91-day, 182-day and 364-day tenors cleared at averages of 11.498%,13.551% and 15.503% respectively. There is no government securities auction scheduled this week the next Treasury Bill auction is scheduled for Wednesday 23rd November 2022 and a 5-year and 20-year Treasury Bond auction on Wednesday 30th November 2022.

There is continued demand for dollars in the Kenyan market against a thin supply, the Kenya shilling remains weak overall trading within the 121.00-126.00 trading range.

She said the dollar lost some ground during Thursday’s session after the release of a softer-than-anticipated inflation print of 7.7% and core CPI print of 0.4% further reaffirming that the Fed may slow down with its aggressive rate hikes in the short term.

Euro strengthened on the back of dollar weakness touching highs of $1.0221 (Shs 3778) during the session and closing Thursday’s session at $1.0208 (Shs 3773).

The Pound followed suit and also strengthened to touch highs of $1.1730 (Shs 4336) during Thursday’s session.

Oil prices were also marginally higher on Thursday due to a weak dollar they had dipped earlier during the week due to some stockpiles in the US and reduced optimism that the China economy will fully reopen soon. Brent Crude traded at $95.93 (Shs 354610) a barrel and West Texas Intermediate traded at $88.64 (Shs 327662) a barrel.

Gold traded at $1761.81 (Shs 6.5million) an ounce.

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