Find visitors' favorite businesstravel Hotels And.... Book your best!

Uganda shilling down against the US Dollar 23-April-2012

The Ugandan shilling inched lower on Monday, weighed down by demand for the dollar from banks and the energy sector with market players expecting the local currency to tumble further on companies currency needs at the month-end.

Bank of Uganda (BoU)'s decision to hold off on further cuts in interest rates this month has largely stabilised the shilling which plunged to a 2012 low of 2,620 last month after a surprise rate cut and a slump in debt yields.

Traders said dollar inflows from offshore investors seeking to participate in this week's Treasury bond auction would lend the shilling some support this week.

But at 0953 GMT commercial banks in Kampala quoted the currency of Africa's largest coffee exporter at 2,510/2,520, a notch weaker than Friday's close of 2,505/2,515.

"(Dollar) demand in the interbank market and players in the energy sector has shaved some value off the shilling," said Faisal Bukenya, head of market making at Barclays Bank.

Despite a steep fall in inflation, the central bank held its key lending rate at 21 percent this month from March, citing persistent risks to inflation from high food prices and a weak shilling.

"Market sentiment points towards a weaker shilling on the back of month end corporate demand," said a market brief from Stanbic Bank.

"However, having a Treasury bond auction that is expected to attract some portfolio flows ... might cushion the anticipated demand."

The central bank is scheduled to sell 100 billion shillings ($39.74 million) worth of 3-year Treasury bonds on Wednesday and some market analysts say yields may rise.

With a weak export base, Uganda relies significantly on foreign investors buying its debt to support its currency against the dollar.

Ahmed Kalule, a trader at Bank of Africa said ongoing clashes between South Sudan and its northern neighbour and long-time foe Sudan is also hurting confidence in the shilling.

Landlocked South Sudan imports much of what it needs from Uganda and other east African neighbours and an outbreak of war or widespread fighting is certain to hit the shilling as dollar earnings from such trade drop off.

Reuters: 23-April-2012

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Africa Uganda Currency and Forex News .

Haven't yet found what you Want...?

If you haven't yet found what you were looking for or you need detailed information about the subject matter on this page


feel free to ask our business travel consultants.

Farmland for Sale
Prime Commercial Property
Entebbe Rd Land 4 Sale
Over 20 Farmland Parcels
Property & Plots of Land

Uganda Online SuperMarket
Online SuperMarket

Uganda Coffee Safari
Book My Coffee Tour

Uganda Honey
Uganda HoneyComb

Subscribe to our Business Travel Newsletter

Enter Your E-mail Address
Enter Your First Name (optional)

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Africa Uganda Business Travel News Digest.

Hotel Booking

Car RentalCar Hire

Africa Uganda Shipping & Handling ServicesShipping & Handling Services

Our Sponsorship Policy

Apple Guavas available
Africa Uganda Plants GuideAfrica Plants Guide

Charity Investment Guide
Changing Lives

Africa Uganda SMS Guide
Africa Bulk SMS

Poultry Investment Guide
Poultry Business Guide

Related Pages

Uganda Hotels Directory

Uganda Hotels Booking Guide

Houses U can buy Uganda Real Estate Guide Industrial/Farmland Deals

Uganda Real Estates Guide

The Mountain Gorilla

Uganda Safari Guide

Uganda Weather Today

Book My Hotel

Please note that all fields followed by an asterisk must be filled in.

Please enter the word that you see below.


Uganda Currency