The Uganda Shilling has continued to depreciate against the United States dollar, meaning imports into the country will continue to be more expensive for Ugandans.
bank of Uganda Governor, Emmanuel Tumusiime Mutebile
Many foreign exchange providers are trading the one US dollar for 2,386 Uganda shillings, the lowest the country’s currency has ever been to the US dollar.
While exporters will be happy at the news, the country’s balance of payments that are hugely in favour of imports mean most Ugandans will rue this continued decline of the Uganda shilling.
That is the Bank of Uganda– the country’s central bank said today they are planning to interve in the forex market to prevent further depreciation of the Uganda shilling against the US dollar and other major foreign currencies.
Uganda’s central bank Bank of Uganda said today that it was looking to intervene in the market after the shilling slid to a new record low of 2,386/96.
After selling $20 million in the Uganda forex market on Friday, the Bank of Uganda is expected to release more US dollars into the Uganda economy and save the shilling from further depreciation.
With recent news of increasing remittance inflows from Disapora Ugandans in 2010 increased to $980.9m from $778 in 2009, it is rather surprising that the shilling should continue to depreciate since more US dollars should be available in the Ugandan market.
Some reports have indicated the uncertainty ahead of the 2011 Uganda general elections and strong dollar demand from corporate bodies are responsible for the limited dollar presence in the market that is resulting in further fall in value of the Uganda shilling.
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