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Uganda shilling loses ground through the week

The Uganda shilling losty ground against the dollar

The Uganda shilling losty ground against the dollar

The local unit was relatively weak during the week, with dollar demand from offshore investors, energy and manufacturing firms outstripping existing supply from commodity exporters and remittance firms. 

The local unit was seen trading at 3805/3815 on Friday morning compared to the week’s opening of 3800/3810 per dollar. It is expected to continue trading within the 3780–3850 range in the near term with dividend demand likely to be contained by supply from seasonal commodity inflows in the coming weeks.
 
Liquidity in the money markets eased the prolonged interbank funding pressures at the short end of the curve that have been existing for weeks. Total redemptions and coupon payments in excess of Shs 800 billion made during the week saw interbank overnight levels average at 11.50 per cent. We expect a fairly liquid market in the near term.
 
The Kenya shilling traded stronger during the week supported by inflows from corporates who were seen selling dollars for end-month requirements. The shilling is expected to oscillate within the 128.50-133.50 range in the coming week.
 
The dollar index steadied around 104.8 on Friday as traders geared for the US PCE price index report for April due to be released on Friday afternoon. This report is the Federal Reserve Bank’s preferred inflation gauge. The dollar was seen under pressure earlier in the week as US data showed that the economy grew at 1.3 per cent in the first quarter, missing projections of 1.6 per cent, largely attributed to slower consumer spending.
 
Demand side uncertainties weighed in on oil markets, contributing to WTI crude futures’ fall to about $77.5 per barrel on Friday morning.  Investor attention has now turned to Sunday’s OPEC+ meeting where an extension of supply cuts into 2025 is highly anticipated.

Comments

0 #1 kabayekka 2024-06-05 18:45
So then how much of such a deteriorating local currency is it going to be able to pay the increased debts of this country?
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