Ugandan shilling firmer, helped by inflows from foreign investors

The Ugandan shilling was stronger yesterday, helped by inflows from offshore investors looking to participate in this week’s Treasury debt auction attracted by rising yields.

Commercial banks quoted the shilling at 3,280/3,300, stronger than Monday’s close of 3,295/3,305. The shilling is 15.7 per cent weaker against the greenback so far this year.

“Some inflows from offshore investors who intend to participate in the auction could be lifting the shilling,” said Lucas Ochieng, trader at Orient Bank.

The Central Bank, Bank of Uganda, is due to sell a total of USh170 billion on Wednesday worth of Treasury bills of 91-, 182-, and 364-day tenors. Yields on Ugandan debt have been rising in recent weeks after the Central Bank tightened its monetary policy stance. Traders say the high rates, amidst relatively low inflation, were drawing greater offshore appetite for Ugandan debt.