The local currency kept a positive outlook, as earlier forecast of increased dollar demand underpinned by the reopening of the economy did not come through at the scale that was expected. Trading volumes remained low keeping the unit within the range of 3520/30.
In the fixed income, a record demand was registered, as more than 500 billion in bids were received at the weekly auction.
Yields remained generally flat at 6.501%,8.400% and 10.000% for 91, 182 and 364 day tenors.
In the regional markets, the major currencies remained sensitive to the global risk sentiment. Kenya, Zambia, Nigeria currencies all slipped undercut by soaring demand, while Tanzania shilling traded stable.
In the global markets, the US dollar slid with US treasury yields retreating after hitting a two-year peak on the 2 and 10 year curve. However in the medium term the greenback remains well supported as investors prepare for a widely expected interest rate hike in March.
Outlook for the shilling indicate a mild bullish stance as market activity remains unusually low with disruptions in the local retail oil market also having an impact on market demand.
January 14 – January 21, 2022: Weekly financial markets review and outlook with Stephen Kaboyo
Stephen Kaboyo, Founder and Managing Director Alpha Capital Partners
