The Ugandan shilling was stable on Friday but was expected to gain on the back of hard currency inflows from foreign investors attracted by rising yields on government debt.
At 1133 GMT commercial banks quoted the shilling at 2,863/2,873, little changed from Thursday's close of 2,860/2,870.
David Bagambe, trader at Diamond Trust Bank, said there was limited dollar demand from banks and companies.
Rates on Ugandan debt instruments have been climbing in recent months on worries government spending will likely escalate ahead of general elections due early next year.
At this week's Treasury bond auction, the weighted average yield on the two year notes rose to 16.175 percent from 14.322 percent at their last sale on Dec. 3.
Rates on the ten-year bonds jumped to 17.019 percent from 14.770 percent when they were last sold on November 5.
Bagambe said in recent days the central bank or Bank of Uganda (BoU), wary of exacerbating pressure on the shilling, had not been conducting their daily hard currency purchases.
BoU buys about $5 million daily to build its foreign reserves.
No comments:
Post a Comment