The Ugandan shilling was flat on Friday with scant appetite for dollars from both merchandise importers and commercial banks, traders said.
Catherine Kijjagulwe, the Absa bank Uganda head of trading noted that there had been a quiet session on Friday which saw the Uganda shilling closing the day marginally strong at the 3810/3820 levels from the day’s opening of 3815/3825 with limited activity on the demand side outmatched by inflows from NGOs and Exporters.
“Money Markets were fairly liquid on Friday with overnight yields at averages of 10.11%. Bank of Uganda will hold a UGX285 billion Treasury Bill auction on Wednesday 14th September 2022,” Kijjagulwe said.
A report by Centenary Bank indicates that the euro jumped to a more than three-week peak versus the dollar on Monday and sterling rose to the highest this month as European Central Bank officials pushed the case for further aggressive monetary tightening.
The Sterling rose to $1.1681 and was last 0.24% higher at $1.1611. ECB policymakers see a rising risk that the key rate will need to increase to 2% or more to curb record inflation.
South Africa’s rand weakened on Thursday, as the U.S. dollar rose after Federal Reserve Chair Jerome Powell reiterated a hawkish tone to battling inflation.
Market Outlook: The shilling is forecast to remain unstable with a bias of weakening against the dollar.