Commodity dollars to boost shilling

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“Demand is likely to remain muted. Market outlook indicates that the shilling will broadly trade in stable mode over the coming days supported by end of month and commodity inflows as they spill over into the first trading week of October,” Kaboyo said.

The shilling bounced back to trade at 3,815.79/3,825.79 buying and selling respectively against the dollar in the afternoon trading session; traders attributed the movement to dollar receipts for Uganda’s commodity exports such as tea and coffee.

At the close of business on Monday the shilling was marginally weaker trading at 3,817.97/3,827.97 according to Bank of Uganda data. Stephen Kaboyo of Alpha Capital Partners said the market outlook indicate that the shilling will broadly trade in  stable mode this week as dollars flow in.

“Demand is likely to remain muted. Market outlook indicates that the shilling will broadly trade in stable mode over the coming days supported by end of month and commodity inflows as they spill over into the first trading week of October,” Kaboyo said.

Last week, in the interbank market, overnight funds traded at 6% while one week funds traded at 9%. In the fixed income market, a sh170billion treasury bill auction was held and yields marginally dropped on the 91 day and 364 day bills at 9.451% and 11.659% respectively.

The central bank will announce a new monetary policy tomorrow which likely affect the exchange rate.

NewVision.co.ug

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