The Uganda Shilling was slightly firmer on account of subdued demand from the main players in the market. Trading held in a narrow range of 3525/35.
In the fixed income market, governments bonds were relatively stable with the yield on 15 year bond dropping 9 basis points to 14.400% as some speculative bids were discarded in order to keep rates under control, while the 3 year bond yield edged up by a little over 100 basis points to trade at 11.390%.
In the regional currencies, the Kenya shilling weakened due increased dollar demand from the manufacturing sector coupled by corporate demand for dividend payments. The elevated demand outstripped the supply from commodities exporters. Commercial banks quoted the shilling at 109.05/25.
Global markets
In the global markets, the US dollar was well bid, trading in upward stroke, touching the highest level in 4 months against a basket of major currencies. In recent weeks the greenback has risen with US bond yields as prospect of reduced Federal Reserve stimulus weakened bond prices.
Outlook suggest range bound trading with the shilling likely to draw benefit from sustained weak demand as well as numerous risks on the domestic economic front. In addition the continuity of an accommodative policy stance policy will play in support.
