BY STEPHEN KABOYO
The Uganda shilling was broadly unchanged, but keeping a defensive posture due to on and off demand for dollars. The unit held within a range of 3515/25.
In other economic news BOU kept the policy rate unchanged at 6.5% following the fully reopening of the economy , citing renewed business momentum in several sectors of the economy.
In the fixed income, yields on short term government securities remained flat. The 91 day continued to correlate with the CBR an indication that interest rates will remain steady for a while.
Additionally, markets have priced in lower inflation expectations in the coming months. The yields printed at 6.501%, 8.400% and 9.700% respectively.
In regional markets , the Kenya shilling was stable with supply and demand evenly matched at 113.25/75 , while in South Africa , the rand was on the back foot as data showed consumer inflation slowed lowering expectation of domestic interest rate hikes.
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In the global markets, US dollar broke a losing streak following Russia’s aggressive actions on Ukraine that jangled market nerves and boosted safe haven bets. In Britain, the sterling strengthened against the Euro on expectation of interest rate hikes by the Bank of England.
Outlook for the local unit indicate choppy trading as market players reposition for month end which could boost demand for dollars.
The writer is the managing director Alpha Capital Partners
