Bloomberg News

Uganda Shilling Gains for Second Day to Dollar on Weak Supply

October 13, 2011

Oct. 13 (Bloomberg) -- Uganda’s shilling strengthened for a second day against the dollar amid tight supply of the currency of East Africa’s third-biggest economy.

The shilling appreciated as much as 0.8 percent to 2,852.4 per dollar and traded up 0.7 percent at 2,855 by 2:13 p.m. in the capital, Kampala, after closing at 2,875 yesterday, according to data compiled by Bloomberg. The currency has lost 19 percent this year, making it the world’s second-worst performer after Kenya’s shilling. Uganda’s shilling reached a record-low 2,897.5 on Sept. 23.

“We are basically seeing weak demand for the dollar because major buyers are deeming the current rate as high,” Faisal Bukenya, the head of currency trading at Barclays Bank Uganda Ltd. said by phone from Kampala. “The other problem is that there is lack of the shilling in the market.”

The central bank raised the key interest rate by four percentage points to 20 percent on Oct. 4 to try to stem inflation, which accelerated to a more than 18-year high of 21.4 percent in August from 18.8 percent in July, the Uganda Bureau of Statistics said on Aug. 31.

--Editors: Ana Monteiro, Alex Nicholson

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


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus