The Uganda shilling continued to beat expectations and maintained a bullish stance supported by remittances and charities. The unit threatened to break lower the support level of 3750.
In the fixed income market, a treasury bill auction with UGX285 billion on offer was held. Yields remained flat with Bank of Uganda cutting off outlier bids. The market bidding behavior reflects a return premium for the greater uncertainty over government fiscal situation.
In the global markets, the dollar languished, losing significant value against many of its rivals following weaker than expected US CPI lowering expectation for aggressive Fed rate hikes going forward. The 7.7% number boosted market expectations that inflation may have peaked in the US.
In the coming weeks, it is likely the shilling mild bullish trend will likely hold on account of subdued demand as domestic financial conditions continue tighten
Source: CEO East Africa
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