(Kampala) – The Ugandan shilling traded flat on Thursday as the currency faced pressure from heightened hard currency demand, particularly from energy importers. As of 08:30 GMT, the shilling was quoted at 3,675/3,685 in commercial banks, the same levels recorded at Wednesday’s close, traders confirmed.
In Wednesday’s session, the Ugandan shilling experienced a brief dip, attributed to high interbank demand, which led it to trade at lower levels of 3,690/3,700, down from its opening range of 3,665/3,675. However, commodity and remittance inflows during the afternoon helped the currency regain some stability, closing at 3,675/3,685 by the end of the day.
According to a report from Absa, tight conditions in the money markets drove overnight yields to an average of 11.46% on Wednesday, reflecting heightened demand among financial institutions. Bank of Uganda held a Treasury Bill auction during the session, with yields in the 91-day, 182-day, and 364-day tenors clearing at averages of 11.191%, 13.636%, and 14.752%, respectively.
The auction results indicate investors’ current preference for shorter-term securities, possibly due to concerns over ongoing currency volatility and economic conditions. The shilling remains under scrutiny, especially given the Bank of Uganda’s stance on stabilizing the currency amid external pressures, such as the impact of reduced foreign investment.
| Treasury Bill Auction Results | Yield (%) |
|---|---|
| 91-day tenor | 11.191% |
| 182-day tenor | 13.636% |
| 364-day tenor | 14.752% |
