The Uganda Shilling closed the week steady riding on the positive sentiment generated by the news of IMF disbursement of Shs1.8 trillion designed to assist the country deal with the economic effects of COVID 19. Trading was in the range of 3795/3805 during the week ending May08, 2020.
In the shilling interbank money market overnight funds dropped to 5% while one week funds held at 5.5%, the lowest level in the recent past, an indication of low lending activity amongst the banks .
In the fixed income market, a treasury bill with 145 billion on offer was conducted. The amount was significantly lower than usual. Yields slightly dropped to 8.771%, 11.001% and 12.500% for 91,182 and 364 day tenors. The market uptake was high as reflected in the bid to cover ratios of 2.11, 4.14 and 2.56.
In the regional markets the currencies of Kenya and Tanzania exhibited stability, with KES supported by Diaspora flows amid weak dollar demand in the local market, while in Tanzania both demand and supply was evenly matched.
Global markets continued to be ruled by the theme of flocking to certainty. The market dynamics supported the US dollar to ascend to a two week high against all major currencies on safe haven bids in the wake of dire global situation.
“Outlook indicates that the shilling will continue to garner support in the coming weeks from the positive news of the IMF loan disbursement although expected with a lag, but will boost the dollar reserve position and keep markets confidence high,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.
Credit: businessfocus.co.ug
