VANILLA BEANS  SOYBEAN OIL  SOYA CAKE   |  COCOA BEANS   |  COFFEE BEANS


Ugandan shilling firms slightly against US Dollar, eyes on key data 29-Oct-2012

Uganda's shilling firmed slightly against the dollar on Monday due to tight local currency liquidity with traders saying it could gain if the
central bank cuts its key lending rate.

Uganda's statistics office is due to release October's consumer price index data on Wednesday followed on Friday by the central bank's announcement of its benchmark rate for November.

At 1055 GMT commercial banks quoted the currency at 2,581/2,591 to the dollar, from Thursday's close of 2,585/2,595.

Ugandan markets were closed on Friday for a public holiday.
"Local currency liquidity is scarce and that's supporting it (shilling) against the dollar," said Steven Lagat, trader at Stanbic Bank. "However, for a more solid idea of where the shilling is likely to go in the forthcoming days, the market is waiting for inflation and the (central bank rate)."

Some analysts have said the Bank of Uganda is likely cut its
lending rate by about 100 basis points from October's 13
percent.

Money market players say a less aggressive cut in the rate
will help underpin a recovery in yields on Ugandan debt and
restore a measure of confidence in the local currency.

The central bank is due to auction 85 billion shillings ($32.82 million) worth of Treasury bills on Wednesday and the markets will be keen to see whether the yields inch up again after breaking a months-long losing streak at the last auction.

At the last sale on October 17 the benchmark 91-day paper
fetched a weighted average yield of 9.69 percent, slightly up
from 9.66 percent at the previous auction.

"I think a slowdown in the pace of policy easing by the
central bank will please the markets," said a trader at a
leading commercial bank.

"Because such a move would dampen some of the worries on
debt yields ... if that turns out to be the case with November's
CBR, I see the shilling consolidating its gains."

Reuters
29-Oct-2012

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Africa Uganda Currency and Forex News .





Haven't yet found what you Want...?

If you haven't yet found what you were looking for or you need detailed information about the subject matter on this page

then...

feel free to ask our business travel consultants.



Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.