Christmas remittances shoring up shilling

It was a quiet session on Wednesday with the shilling trading within a narrow range between the 3637/3647 levels according to a report by Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda.

“Demand and supply were balanced throughout the day. Bank of Uganda is scheduled to hold a 3-year and 15-year Treasury Bond auction on Wednesday 28th December 2022,” she revealed.

Money Markets were liquid on Wednesday with overnight yields at averages of 9.54%. Bank of Uganda held a Treasury Bill auction and the 91-day, 182-day and 364-day tenors cleared at averages of  11.099%, 11.999% and 13.153% respectively.

A report by Centenary Bank indicates that the Ugandan shilling was firmer on Wednesday as hard currency inflows from the diaspora met with weak importer demand, traders said, adding that the shilling is forecast to strengthen against the dollar.

EUR/USD is threatening its first close below the 10-day moving average, last at 1.0597, since November as it corrects from December’s overbought 1.0737 EBS peak.

Sterling slipped against the dollar and euro on Wednesday as British public borrowing hit a November record, underscoring the challenges for the UK economy. The British pound was down 0.8% at $1.2091.

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