Bloomberg News

Uganda Shilling Slips for First Day in 4 as Companies Buy Dollar

October 17, 2011

Oct. 17 (Bloomberg) -- Uganda’s shilling fell for the first time in four days against the dollar as companies including oil importers sought the greenback to buy supplies.

The currency of East Africa’s third-biggest economy depreciated 0.4 percent down at 2,855 per dollar by 2.09 p.m. in the capital, Kampala, according to data compiled by Bloomberg. It closed at 2,845 on Oct. 14.

“We saw some corporate demand mainly from the oil sector seeking the greenback,” Rogers Lutaaya, a currency trader at Bank of Africa Uganda Ltd., said by phone from Kampala. “The recent appreciation of the shilling over the last few days” prompted companies to buy dollars, he said, adding the shilling is poised to weaken in the coming days because of the local demand for the dollar.

Uganda’s shilling climbed 1.3 percent in the three days through Oct. 14, the biggest three-day increase since Sept. 9. The currency reached 2,897.50 on Sept. 23, the weakest since June 1993. 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, Peter Branton

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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