Uganda shilling stable as BOU mops up liquidity

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The Uganda shilling held firm on Thursday, opening and closing at 3,580/3,590 against the dollar, unchanged from the previous session.

Traders said subdued activity kept the local unit within its recent range, and it is expected to trade between 3,570 and 3,620 in the coming days.

Money market conditions were liquid according to Absa data, prompting the Bank of Uganda to absorb sh543b through a seven-day repurchase agreement. Overnight funding traded at an average of 10.00% while one-week money averaged 10.45%.

The central bank has also scheduled a treasury bond auction for next Wednesday (August 6) with an offer of sh1.4 trillion. Four benchmark securities will be on sale, including the two-year and 15-year re-openings and new issues for the 5-year and 25-year papers.

Globally, the US dollar eased slightly but remained near two-month highs after Federal Reserve Chair Jerome Powell struck a hawkish tone at the end of the central bank’s policy meeting.

The Dollar Index, which tracks the greenback against six major currencies, dipped 0.1% to 99.550 but is still on track for its first monthly gain this year, up more than 3%, reports show.

In cryptocurrencies, Bitcoin rebounded to $118,500 from $116,000, with ether, XRP and other major altcoins also posting gains.