Uganda Shilling Weakens to

Wednesday, 15th June, 2011

THE Ugandan shilling weakened towards an all-time low yesterday, reacting to critical comments from the Central Bank chief about the president’s use of foreign reserves.

Governor Emmanuel Tumusiime-Mutebile told Britain’s Financial Times that he had disagreed with President Yoweri Museveni digging into the country’s foreign reserves to purchase several Russian fighter jets.

Furthermore, the veteran leader had failed to keep his word on redressing the reserves, he told the broadsheet.

Commercial banks quoted the shilling at 2,420/2,425 to the dollar, just shy of the unit’s record low of 2,424/2,429 hit on March 15.

“The market sentiment is gloomy and reflects the governor’s comments that have been published today,” said Faisal Bukenya, the head of market-making at Barclays Bank, after a local paper carried the story.

Reuters