9 July 2012

Uganda Shilling Remains Stable

The Uganda shilling remained stable in the week that closed on July 6 trading in a narrow range of 2465-85 despite the Monetary Policy Committee (MPC) cutting the Central Bank Rate (CBR) by 100 basis points to 19%, Denis Mashanyu, forex trader at Standard Chartered Bank said.

Mashanyu said activity in the market remained muted with most players not showing strong interest at current levels. "Tight liquidity has been the major factor lending support to the shilling as cash markets were caught short due fiscal year end taxes last week," he said, adding yields remained flat due to liquidity constraints and limited interest from investors.

"Next week we expect the shilling to remain range bound with limited activity, 2470 should hold on the downside and 2500 coming in a key resistance level in case of a break on the topside," he added.

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