A pickup in activity on the demand side with some Corporate buyers and interbank buyers led to the marginal weakening of the shilling during Monday’s session to close the day at the 3825/3835 levels from opening levels of 3815/3825, Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda said.
Liquidity remained tight in the Money Markets with overnight yields at averages of 11.43%. Bank of Uganda will hold a UGX 285 billion Treasury Bill auction on Wednesday 12th October 2022. The Ugandan shilling eased slightly on Monday, undermined by a rebound in hard currency appetite by merchandise importers, traders said.
A Centenary Bank report indicated that the USD is broadly stronger on safe-haven flows with a perfect storm hitting the AUD, as markets catch up with the weak China economic news over the weekend plus news of new U.S. semiconductor restrictions on China coupled with Russia’s retaliation after the Crimea bridge attack over the weekend.
Sterling slid versus the dollar on Monday after Friday’s strong U.S. labour market data supported bets the Federal Reserve will keep raising rates aggressively.
The euro, which was also at a 10-day low on the dollar, lost 0.2% against the pound to 87.68 pence.
Market Outlook: The shilling is forecast to weaken against the dollar.