Uganda Shilling hovers on all-time low

Friday, 2nd September, 2011

KAMPALA - The Ugandan shilling hovered just shy of its all-time low against the dollar yesterday as jitters over soaring inflation and the prospect of further anti-government protests weighed on investors.

Traders in Kampala quoted the shilling at 2,817/2,827, a fraction weaker than Wednesday’s close of 2,815/2,825.

The Uganda shilling edged to a new low of 2828.25 on Wednesday on the back of greenback demand from the manufacturing sector and a surge in inflation to its highest level since February 1993.

"The general gloomy conditions of relentless surge in inflation, political uncertainty and dimming growth prospects are increasing local investor appetite for the dollar," said Denis Mashanyu, a trader with Standard Chartered Bank Uganda.

Uganda’s inflation rose to 21.4% in August from 18.8% in July.

Reuters