The shilling experienced one of its most volatile stretches in recent months. It swung wildly as offshore realignments and rising import demand disrupted its long-held stability. The currency opened last…
East Africa is the fastest-growing economic region on the continent. In 2022, Uganda, Kenya and Tanzania attracted over USD13.3 billion worth of foreign direct investment (FDI). This is according to the latest investment report by the business advisory firm Ernst & Young. The report singled out Uganda as having received USD10.2 billion — the highest in East Africa — creating 6,300 jobs. However, a refusal by a Ugandan Commercial Court to respect and enforce a London Court of International Arbitration (LCIA) ruling has turned on the stage lights onto Uganda’s investment climate and may position the country in a bad…
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The Ugandan Shilling was relatively stable with flows from commodity Exeter’s and offshore investors lending support. The unit held in a narrow range of 2715/25. In the neighbouring Kenya market, the Kenyan Shilling lost ground on elevated dollar demand from various sectors, trading at 137.38, and was kept to surrender more ground. In the bond market, the 5 and 20-year bond yields held at 14.750% and 16.250%. The market tendered UGX 726 billion against the offered UGX400 billion. However, the Bank of Uganda was only able to take up UGX226 billion, being mindful of premium bids and their impact on…
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On the 16th of November 2022, the Financial Institutions (Revision of Minimum Capital Requirements) Instrument 2022 was signed into law by Uganda’s Minister of Finance, Planning and Economic Development (MFPED), Hon. Matia Kasaija. The instrument increased the minimum capital requirements for banks by 6 times or 500% from UGX25 billion (USD 6.7 million) to UGX150 billion (approx USD 40.2 million). The increment would however be tiered, starting with a minimum capital buffer of UGX120 billion (USD32.2 million) by the 31st of December 2022 and then UGX150 billion by the 30th of June 2024. Commercial banks are also required to have…
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The Uganda shilling continued on its strengthening trend joining a global rally amid weakness of the dollar. In the local market there was a general slump in demand while supply was mildly enhanced by end month flows mainly from exports . The unit was quoted at 3735/45. In the regional markets, the Kenya shilling was on the back foot trading at a new all time low of 122.20/40 on increased demand from the energy sector. In the fixed income market a treasury bill auction with 285 billion on offer was held. Yields remained relatively flat with BOU seen suppressing yields…
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The shilling traded flat on the back of thin import appetite underpinned by low business activity. Supply was boosted by cyclical remittances. The unit held at 3740/50. In the neighboring Kenya, the currency hit a fresh new low, undermined by huge dollar demand from manufacturing and energy sectors. KES was quoted at 121.85/122.05. In the global markets, the US dollar held ground as markets tried to make sense out of mixed US economic data. The greenback had tumbled in recent weeks on inflation and comments from the Federal Reserve signaling that the Central Bank could put brakes and slow the…
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The Uganda shilling continued to beat expectations and maintained a bullish stance supported by remittances and charities. The unit threatened to break lower the support level of 3750. In the fixed income market, a treasury bill auction with UGX285 billion on offer was held. Yields remained flat with Bank of Uganda cutting off outlier bids. The market bidding behavior reflects a return premium for the greater uncertainty over government fiscal situation. In the global markets, the dollar languished, losing significant value against many of its rivals following weaker than expected US CPI lowering expectation for aggressive Fed rate hikes going…
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The Uganda shilling reversed course and slightly strengthened as end month flows gave support amid subdued demand. The unit traded below the 3800 level for the first time in months. The shilling appreciation bias was expected to be short lived as economic variables in particular inflation painted a bleak picture going forward. In Kenya, the currency took a hit, trading at a fresh record low trading above 120, undermined by elevated demand from oil importers. In the bond market, upward pressure on yields took center stage as markets players slammed huge risk premium on the prices. The worsening fiscal outlook…
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The Uganda shilling firmed in thin trade. Activity was low on both counters. The unit was quoted at 3825/35 in most of the trading sessions of the week. In other peer markets , the narrowing of interest rate differential between the frontier markets and the US is continuing to cause mayhem as the relative interest rate return between local currencies and dollar assets diminish. In the global markets, the US dollar loomed over major peers as treasury yields peaked at multi year high. Gloomy data and down beat corporate outlooks dimmed investor risk appetite . In other major markets, focus…
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The Uganda shilling surrendered its previous gains on revived demand by local firms for imports amid the dollar supply dearth. The unit traded at 3830/40. In other peer markets most of the currencies generally stumbled as the US dollar continued its ascendancy. In the fixed income market, short term yields continued to soar triggered by rising interest rates as investors focused on the short end in the primary market while positioning for the repricing advantage. BOU was less tolerant of higher rates and was seen capping. On the global scene, the dollar climbed to a fresh 24-year peak. The greenback…
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