Shilling firms as Middle East ceasefire calms markets
During the session, traders said the currency briefly touched intraday highs of 3680/3690, a level that drew fresh demand from corporate buyers who had stayed on the sidelines in recent days.
The shilling opened the session stronger at 3730/3740 and extended gains through the day to close at 3690/3700, supported by news of a two-week ceasefire in the Middle East conflict.
KAMPALA - The Uganda shilling strengthened on Wednesday as easing tensions in the Middle East lifted sentiment, pushing the currency to close firmer against the dollar.
The shilling opened the session stronger at 3730/3740 and extended gains through the day to close at 3690/3700, supported by news of a two-week ceasefire in the Middle East conflict.
During the session, traders said the currency briefly touched intraday highs of 3680/3690, a level that drew fresh demand from corporate buyers who had stayed on the sidelines in recent days.
Richard Nsubuga, a currency market analyst at Absa said the renewed activity reflected confidence that external pressures on emerging and frontier currencies could ease, at least in the short term.
In the money markets, liquidity conditions remained comfortable. Interbank overnight and one-week lending rates averaged 9.27% and 10.38%, respectively.
At the Treasury bill auction, yields eased across all tenors compared to the previous sale. The 91-day, 182-day and 364-day papers cleared at 10.384%, 11.304% and 12.251%, respectively.
The central bank accepted sh332.7b, about 93.73% of the amount offered, with a notable under-allocation on the 182-day tenor.