The Uganda shilling strengthened against the dollar today, supported by healthy dollar inflows from both local interbank participants and offshore investors, against a backdrop of subdued corporate demand, according to Absa Bank Uganda market report.
According to the report, the shilling opened the trading session at 3925 / 3935, the local currency gradually gained ground throughout the day, reaching an intraday high of 3890 / 3900 before paring some of its gains to close at 3895 / 3905.
Momentum in the afternoon session was largely driven by strong offshore inflows, with investors converting hard currency ahead of tomorrow’s Treasury bond auction. The increased supply of foreign exchange comfortably outweighed demand, enabling the shilling to post notable gains and maintain a firmer footing through the close of trading.
Money markets were liquid with overnight funding rates averaging at 9.75%. The secondary market registered decent activity today as instruments exchanging hands with a mixed pool of investors involved.
Bank of Uganda will conduct Treasury bond auction tomorrow where a new 15-year bond will be issued together with the re-opening of the benchmark 2-year, 5-yerar and 25-year maturities.
