The local unit was largely stable this week as dollar supply from commodity exporters and portfolio investors continued to keep existing demand from energy and manufacturing firms at bay.
The local unit was seen trading at 3675 / 3685 levels on Friday, a little weaker than the week’s opening of 3670 / 3680. The currency is expected to continue trading range-bound within 3660 – 3700 levels in the near term.
According to Richard Nsubuga, Trader CIB Markets Absa Bank Uganda, Money markets were tight during the week, seeing overnight trades averaging at 11.35% while one-week trades averaged at 10.93%.
Last Wednesday’s treasury bill auction attracted a lot of interest from a pool of investors, evidenced by the bids received by the Central Bank. A total of Shs 413.654 billion in Face Value was accepted compared to the offered size of Shs 355 billion. The 91-day, 182-day, and 364-day maturities cleared at 10.999%, 13.899%, and 15.002%, respectively.
“The Kenya shilling was seen trading under less pressure during the week, largely premised on slowing demand from corporates. The dollar-shilling pair was seen trading at 129.00 / 129.25 on Friday and is expected to continue trading within the 128.80-129.80 range in the near term,” Nsubuga said.
The dollar index was seen trading stronger at $107.3 on Friday as the deadline for President Trump’s latest tariffs draws closer. Trump confirmed that his proposed 25% tariffs on Mexico and Canada will take effect on Tuesday, 04th March, together with the 10% on China.
He says strong US dollar demand triggered a downward price move for gold as President Trump’s tariff agenda continued to loom. The commodity was seen trading below $2860 per ounce on Friday, which showed a first weekly low in nine months.
WTI crude futures declined to approximately $70 a barrel, reducing to over 2% increase seen in the previous session as traders evaluated ongoing supply risks. The situation escalated when President Trump cancelled Chevron’s operating license in Venezuela on Thursday, which could lead to a tighter global supply.
