Bloomberg News

Uganda Shilling Pares Fourth Quarterly Drop on Dollar Sales

September 30, 2011

Sept. 30 (Bloomberg) -- Uganda’s shilling strengthened against the U.S. currency, paring a fourth quarter of declines, as companies sold dollars to make local payments.

The currency of East Africa’s third-biggest economy appreciated 0.4 percent to 2,845.15 per dollar at 2:36 p.m. in the capital, Kampala, reducing its decline so far this quarter to 9 percent.

“The gain is purely because people are short of shillings and are now selling dollars to raise them,” Ahmed Kalule, the head of currency trading at Bank of Africa Uganda Ltd., said by phone from Kampala.

Uganda’s shilling reached 2,897.50 on Sept. 23, the weakest since June 1993, on concern Europe’s debt crisis will weaken riskier assets further, increasing demand for dollars as a safe- haven investment.

The currency has slipped 19 percent this year to the dollar, making it the second-worst performer after Kenya’s shilling. A surge in food and fuel prices pushed inflation to a more than 18-year high of 28.3 percent this month from 21.4 percent in August, the Uganda Bureau of Statistics said today.

--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


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