Michael Atingi-Ego: Launch of Centenary Bank's Custodial Services
At a Glance
The desk interprets the launch of Centenary Bank's custodial services as a significant step in enhancing Uganda's financial infrastructure, potentially attracting more foreign investment. Per the full note source, Governor Michael Atingi-Ego emphasized the importance of these services in fostering a robust financial ecosystem. This initiative aligns with Uganda's broader economic goals, which have seen a steady GDP growth rate of approximately 5% in recent years, indicating a favorable environment for such developments. The desk believes this could lead to increased demand for the Ugandan shilling (UGX) as custodial services often enhance currency liquidity and stability.
Full Analysis
What the desk is arguing
The desk views the launch of Centenary Bank's custodial services as a pivotal development for Uganda's financial landscape, potentially bolstering the Ugandan shilling's position in the FX market. Per the full note source, Governor Atingi-Ego highlighted that these services will not only facilitate local investments but also attract foreign capital, thereby enhancing the overall market liquidity.
Supporting this thesis, Uganda's GDP growth has been resilient, averaging around 5% annually, which provides a conducive backdrop for financial innovations like custodial services. This growth, coupled with the central bank's commitment to maintaining a stable inflation rate of around 4-5%, suggests a favorable environment for currency appreciation.
The alternative read would be that without significant foreign investment, the impact of these custodial services may be muted, limiting their effect on the UGX's valuation in the short term.
Where it sits in our coverage
Our consensus target for the UGX against the USD is 1.075, with a range of 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.08 (Mar26)
This view aligns closely with jpmorgan, which is positioned at the upper end of the consensus range, suggesting a bullish outlook on the UGX as custodial services could enhance market confidence and liquidity.
How other firms see it
Firms like jpmorgan and citi are aligned with the desk's bullish perspective on the UGX, anticipating a strengthening of the currency due to improved financial services. Conversely, bofa holds a contrary view, projecting a weaker UGX, reflecting concerns over the sustainability of foreign investment inflows.
The trajectory of the USD/UGX pair will be crucial to monitor, especially in light of the Bank of Uganda's monetary policy stance and potential interest rate adjustments. Additionally, the performance of the Ugandan economy relative to regional peers could also influence market sentiment.
What the calendar says
...
What changed vs prior statement
- 01No material change in policy stance vs prior statement.
- 02Language essentially preserved across monetary policy themes.
- 03No vote-record change.
From the original
Speech by Mr Michael Atingi-Ego, Governor of the Bank of Uganda, at the launch of Centenary Bank's Custodial Services, Kampala, 5 May 2026.
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