The Uganda shilling extended its depreciation against the US dollar in today’s session, weakening from opening levels of 4020 / 4030 to close at 4045 / 4055, according to the Absa Bank Uganda’s Tuesday market report.
The sustained pressure continued to stem from strong dollar demand from corporate players, with offshore investors being particularly active as they unwind local bond holdings in favor of safe haven assets. On the supply side, dollar inflows remained limited and were insufficient to match the strong demand, keeping the soft shilling under pressure throughout the session.
Money market liquidity remained constrained during the session, keeping funding rates elevated at an average of 10.75%. The central bank remained on the sidelines, with no intervention in the market.
Bank of Uganda will conduct a treasury bond auction this Wednesday where the benchmark 3-year, 10-year and 20-year maturities will be reopened
