The Uganda shilling strengthened against the US dollar in Wednesday’s trading session, supported by optimism surrounding the de-escalation of political tensions in the Middle East, according to Absa Bank Report.
The local currency opened the day at 3730 / 3740 and appreciated to an intraday high of 3725 / 3735.
In the money markets, liquidity conditions continued to remain ample, with overnight and one-week funding rates averaging 9.75% and 10.00%, respectively. Despite improved liquidity, the Central Bank remained on the sidelines, refraining from any liquidity management operations.
Yields at today’s Treasury bill auction edged lower on the 182-day and 364-day maturities dropping 15bps and 50bps respectively driven by strong investor appetite on the back of heavy liquidity in the domestic money markets.
The 182-day and 364-day maturities cleared at 10.249% and 11.00% respectively compared to previous auction levels of 10.400% and 11.501%. The 3-month paper was unchanged at 10.002%.
The Ministry of Finance accepted bids totaling UGX 381.086 billion in face value compared to offered size of UGX, representing an acceptance rate of 109%, underscoring robust investor appetite amid the prevailing liquidity conditions.
