During Thursday’s trading session, the Ugandan shilling maintained its stability against the US dollar, closing at levels of 3692/3702 compared to its opening rates of 3685/3695. This stability indicated a relatively balanced market sentiment with comparable levels of demand and supply for the dollar.
Traders reported that the day saw a harmonious flow of transactions, as both dollar sellers and buyers participated actively, thus preventing any significant fluctuations in the exchange rate. This balance contributed to the shilling remaining rangebound throughout the trading day.
Liquidity and Money Markets
Absa traders noted that the money markets experienced liquidity, reflected in overnight yields averaging at 9.74%. The Bank of Uganda (BOU) responded to this liquidity surplus by conducting Open Market Operations (OMO), including a 7-day Repo and issuing BOU Bills to absorb excess funds from the market.
Upcoming Treasury Bond Auction
Looking ahead, the Bank of Uganda announced plans to conduct a treasury bond auction featuring three different tenors: 2 years, 5 years, and 15 years. The auction aims to raise funds amounting to Sh990 billion, providing investors with opportunities to participate in government securities across varying maturity periods.
The stability exhibited by the Ugandan shilling in Thursday’s trading session underscores the resilience of the currency amidst a balanced market environment.
Market participants watching for any developments that may impact currency movements in the near term As the Bank of Uganda continues its efforts to manage liquidity and facilitate government debt financing through treasury auctions.
