The Uganda shilling was set to end the week on a weaker tone, reversing the gaining streak on rebound of strong demand mainly from importers and commercial banks squaring positions. The unit crossed over into 3800 territory on both bid and ask. In regional currencies, the Kenya shilling weakened to trade at 119.40/60 as business activity resumed after the general elections . With the recent development on UGX/USD a pair, it is expected that inflation numbers will reflect high pass through effects of the shilling weakness going forward. In the fixed income market, the rising trend in yields continued, however…
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The Uganda Shilling pared losses after struggling for momentum against a bullish dollar. The shilling rally was driven mainly by domestic factors that dented demand. Trading was in the range of 3805/15. In other markets the Kenya shilling was stable trading in the range of 119.25/40, as markets were keenly following the post elections developments. In the bond market, the 2 year and 10 year traded at yields of 14% and 16.25%. On a real yield or currency hedged basis, Government of Uganda bonds continue to offer relatively competitive returns, in view of headwinds facing other asset classes. In global…
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The shilling was in a risk off trade as foreign institutional investors continued to reduce their exposure to riskier assets. The currency tested the 3900 level and later retreated to trade at 3875/ 85, tracking a similar trend of almost all frontier market currencies with exception of the Kenya shilling that traded flat as the market slowed down ahead of the national elections. The shilling has lost almost 9% of its value since the beginning of the year. In fixed income markets, demand was greater than the amount on offer in the treasury bills. BOU was restrictive by cutting off…
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The perpetual decline of the shilling continued with the unit touching record lows, inching towards the 3900 levels as offshore investors dollar demand coupled by oil importers demand intensified. The exchange rate remains a key variable in Uganda’s economy; therefore, the sustained depreciation will continue to pose serious economic challenges. In most emerging economies, markets made cautious gains as investors mulled over a possible slowdown in the pace of US Federal Reserve rate hike. In the global markets, the US Federal Reserve jacked up its benchmark rate by three quarter of a percentage point in an effort to cool the…
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The Uganda shilling slumped to an all time record low against the dollar, breaching a crucial psychological level of 3800 on increased demand mainly from offshore portfolio investors exiting the fixed income market. In the regional currencies, the Kenya shilling cooled off as demand for dollars waned as markets were in a wait and see mode, trying to determine the next trading level as elections drew closer.In the fixed income market, resident investors continued to place a risk premium on government paper as government revenues remained structurally low, with short term to medium outlook for public finance looking hazy. While…
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The Uganda shilling weakened early in the week and later recouped some losses in choppy trading as mid month tax payments took away appetite for dollars. Trading was in the range of 3760/70. Elsewhere in the region, the Kenya shilling was on the back foot, touching an all time low of 118.25/45, due to increased dollar demand as election anxiety picked up.In bond market, upbeat demand kept yields relatively flat at 14.750 and 16.750 for the 3 and 5 year bonds. Currently, Uganda’s yield curve from the middle to the long end has been flat, going forward, this is likely…
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The Uganda shilling caught a breather in the early part of week but edged lower against the resurgent dollar at close of week as demand picked up mainly from the energy sector. Trading was in the range of 3750/60. On the monetary policy front, the Central bank hiked the policy rate. The heightened risks to inflation and the shilling have greatly increased the likelihood of a more aggressive interest rate path.In the regional markets, it was more of the same in Kenya and Tanzania, unmatched demand kept the currencies on the edge.In the fixed income yields sustained an upward trajectory…
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The Uganda shilling was set to end the week mostly flat, a bit firmer cushioned by tight liquidity conditions mainly on account of end year corporate tax obligations that sucked out shillings in the market coupled by aggressive mop by the Central Bank through non calendar bond issue across the entire yield curve that collected in excess of 500 billion against a target of 780billion. Trading was in the range of 3755/65.The non calendar issuance highlighted the need by the treasury to raise financing in order to meet end of fiscal year commitments. In other peer markets, most currencies gave…
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The Uganda shilling edged lower against the dollar as the market remained pressured by mainly offshore demand and pockets of demand from energy and manufacturing sectors. Trading held in the range of 3760/70. In the regional currencies, the Kenya shilling eased and hit fresh lows to trade at 117:60/80 as investors remained nervous of a parallel forex market amid dollar shortages.In other notable news, The Central Bank directive on CRR and Net open position for commercial banks and its eventual reversal created mixed signals in the market.In the local debt market, yields at the short end climbed mirroring other peer…
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The Uganda shilling continued to battle a range of headwinds surrendering gains post Bank of Uganda intervention. Foreign portfolio disinvestment was the main driver of the currency weakness during the week. Trading was in the range of 3770/80. A weak shilling has a number of implications for the country’s growth prospects. It reduces the purchasing power, makes imports expensive, fuels inflation, increases the government’s cost of borrowing at the same time making debt servicing difficult.In the regional markets, currencies were on similar decline with Kenya shilling trading at 117:20/40.In fixed income, the outturn in the local bond market was reflective…
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