Bloomberg News

Uganda’s Shilling Falls to Two-Week Low on Banks’ Dollar Demand

July 29, 2011

   July 29 (Bloomberg) -- Uganda’s shilling, the world’s worst- performing currency in the last two months, fell to the lowest in more than two weeks against the dollar as local lenders sought to buy the U.S. currency.    The currency of Africa’s second-biggest coffee producer depreciated 0.2 percent to 2,615 per dollar, the weakest intraday level since July 12 by 12:32 p.m. in Kampala, the capital. The decline pared the shilling’s gain this month to 2.5 percent, the first monthly increase since April.

“It is interbank interest which drove the market,” Benon Okwenje, a currency trader at Stanbic Bank Uganda Ltd., said by phone from Kampala. “There were some banks which were buying the dollar,” he said without giving further details.

The shilling has depreciated 8.5 percent against the dollar over the last two months, making it the world’s worst performer in the period. A surge in food and fuel prices pushed inflation to a more than 18-year high of 18.7 percent this month from 15.7 percent in June, the Uganda Bureau of Statistics said yesterday.

--Editors: Ana Monteiro, Linda Shen

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net -0- Jul/29/2011 10:51 GMT


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