Bank of Uganda data shows that the shilling closed at 3,715/3,725 buying and selling respectively on average. T
The shilling gained marginally on Wednesday and is forecast to register further gains due to slowing dollar demand by importers as well as flows from Christmas remittances from Ugandans abroad and non-governmental organisations, analysts say.
Bank of Uganda data shows that the shilling closed at 3,715/3,725 buying and selling respectively on average. This was slightly stronger than 3,721.04/3,731.04 in the first trading session of the day.
Stephen Kaboyo, the CEO of Alpha Capital Partners noted that the shilling has been strengthening for a week now due to the subdued appetite for forex from market players, but towards the close of the week, the unit marginally weakened, undercut by a mild rebound in demand across all sectors.
In the regional markets, the Kenya shilling came under pressure and weakened to a 10 month low on account elevated import demand and excess liquidity in the money markets. Trading was in the range of 102.95/103.15.
In international currency markets, the US dollar was lifted by events in Britain as the pound sterling lay battered after a bout of political turmoil fanned fears that the UK could crush out of the EU without a divorce deal.
In the commodities market, oil prices regained a little composure after the recent drubbing helped by a decline in US fuel stockpiles and the possibility of a cut in OPEC output. A barrel of Brent crude traded $67.14.
“In the coming days, the shilling is likely to firm up, supported by trickle in of end year inflows, while on the demand side, market activity is expected to slow down on account of corporates beginning their end of year winding up processes,” Kaboyo said.