The shilling traded within the 3815/3825 trading range throughout Friday’s trading session with limited activity on the supply and demand side, according to a report by Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda.
“Money Markets faced tight liquidity conditions with overnight yields at averages of 11.66%. Bank of Uganda will hold a UGX 285 billion Treasury Bill auction on Wednesday 12th October 2022,” she said.
Hitherto, the first trading week of the new month saw continued inflows from NGOs, commodity exporters and other sectors that comfortably covered and outweighed the pockets of demand seen from Corporates and importers during the week. Unless significant activity picks up on either the supply or demand side the unit is likely to continue trading within a narrow range between 3780-3880 levels in the near term.
The short term Money Markets continued to face tight liquidity conditions with overnight yields trading between 11.00% -12.00% throughout the week. Bank of Uganda held a Treasury Bond auction and yields in the 3-year and 15-year cleared at averages of 15.250% and 17.985% respectively. Bank of Uganda will hold a Treasury Bill auction on Wednesday 12 th October 2022.
The Kenya shilling saw some inflows during the week however there was a continued
requirement for dollars on the demand side keeping the unit weak within the 120.00 – 126.00 trading range despite some dollar selling by the Central Bank.
The dollar appreciated during Thursday’s session as market players continued to purchase the safe haven, Non-Farm payroll data is anticipated to print lower than the previous reading.
The Euro weakened on Thursday due to dollar strength and unfavourable economic data
releases in the Eurozone touching lows of $0.9786 and closing at $0.9788.
The Pound also remained weak touching lows of $1.1113 on Thursday and closed the day at $1.1158. Oil prices edged higher on Thursday as OPEC cut daily global oil supply by 2 million barrels.
Brent crude traded at $94.93 a barrel, West Texas Intermediate (WTI) traded at $88.93 a barrel. Gold traded at $1711 an ounce.