The Uganda shilling steadied against the dollar, recouping its losses, largely supported by offshore dollar inflows. The dollar- UGX rate hovered around 3550 throughout the week.
In the regional markets, Kenya shilling was little changed, but was expected to weaken, undercut by strong demand from merchandise importers. Tanzania, Zambia and South African currencies were broadly stable and were expected to trade range bound. Meanwhile, Nigeria became the first Africa country to adopt a Central Bank digital currency, the eNaira amid skepticism and uncertainty. The digital unit is expected to maintain parity with the Naira.
In the global currencies, the US dollar and its major peers were little changed as investors digested ECB policy decision that kept the rate unchanged. While in the US, third quarter growth and jobs data were expected to arouse some FX volatility
In the coming days the local unit is expected to remain slightly firmer, drawing benefit from a weaker dollar, and end month flows that will lift supply levels.
October 22 – October 29, 2021: Weekly financial markets review and outlook with Stephen Kaboyo
Stephen Kaboyo, Founder and Managing Director Alpha Capital Partners
