Shilling Gets Brief Relief As Yields Surge

There was huge interest in the two-year and 10-year bonds auctioned last Wednesday as investors with dollars cashed in and handed the shilling some temporary relieve.

Bank of Uganda sold the bonds, worth Shs 180bn ($60m) in total, which saw the shilling appreciate to Shs 2,99000, ger than the Shs 3,00515 it

opened last Monday. The yields peaked at 17.013 per cent for the two-year bond from the 16.7 per cent it attracted in March.

The ten-year bond had a yield of 17.69 per cent, up from the 17 per cent investors earned when it was last sold in January. Yet, the gain on the local

currency was temporary as it slipped slightly, closing at Shs 2,9993,009 on Friday.

In a statement, James Mutuku of Standard Chartered bank said: “Corporate dollar demand from telecom, manufacturing and oil importers in the week was well matched by inflows primarily from offshore investors looking to invest in the Uganda bond market.”

The investors are mostly attracted by the high yields. This year alone, the shilling has lost eight per cent of its value, BOU says. Last month, BOU sold

$207m to stabilise the currency. Uganda Electricity Transmission Company Limited remains one of the top purchasers of dollars, taking $21.2m in March alone, which reduces on the impact of BOU’s sale.

Mutuku expects the shilling to trade at Shs 2,990 this week.

Source : The Observer


Uganda committed to peaceful co-existence with Rwanda: FM Kutesa

KIGALI, Ugandan and Rwandan delegations met Monday in a frank and cordial atmosphere in the Rwandan capital Kigali in a bid to warm ties between the two neighbouring East African nations muddled by recent flare-ups.Ugandan foreign affairs minister Sam …