The Uganda shilling strengthened against the dollar during today’s trading session, supported by subdued corporate dollar demand, according to Wednesday’s Market Report by Absa Bank Uganda.
The local currency also benefited from month-end foreign exchange inflows, particularly from remittances and non-governmental organizations (NGOs). As a result, the shilling appreciated from opening levels of 3755 / 3765 to close at 3730 / 3740.
Liquidity conditions in the money market remained ample, with overnight and one-week lending rates averaging 9.50% and 9.70%, respectively. Despite the improved liquidity, the Central Bank remained on the sidelines, refraining from any liquidity management operations.
Yields from today’s Treasury bond auction declined across the curve, with the 2028s, 2032s, 2039s and 2050s bonds clearing at 12.50%, 14.25%,15.65% and 16.00%, respectively, representing reductions of 30bps, 45bps, 10bps and 29bps respectively from the previous auction.
The Government offered a total of UGX 1.4 trillion and accepted UGX 1.36 trillion in face value, translating into UGX 1.45 trillion in cash proceeds.
