The Uganda shilling extended its depreciation streak against the US dollar in today’s session, weighed down by sustained interbank demand for the greenback, according to Absa Bank Uganda’s Monday market report.
Ongoing geopolitical tensions in the Middle East, including renewed exchanges between the US and Iran, did little to support the local currency. End-month inflows from remittances and NGOs provided some liquidity but were insufficient to offset demand pressures. The currency closed the day trading at 3780/3790, compared to opening levels of 3770/3780.
In the money markets, liquidity conditions continued to improve supported by maturities last week, with overnight and one-week funding rates averaging 9.75% and 9.90%, respectively. Despite the ample liquidity conditions, the central Bank of Uganda refrained from its liquidity management operations.
