Ugandan shilling falls to 4,500 to the dollar
By the AFREEQUE newsroom, based on Tuko
The Ugandan shilling reached 4,500 to the dollar on 23 October, its lowest nominal level in more than 30 years, after losing more than 11% in October. The Bank of Uganda raised its benchmark rate to 12%, while Yoweri Museveni refused to use foreign exchange reserves, Tuko reported.
The Ugandan shilling briefly reached 4,500 to the dollar on 23 October, its lowest nominal level in more than 30 years, before ending the week at around 4,429 shillings, Tuko reported. The currency lost more than 11% of its value in October alone.
The Bank of Uganda raised its benchmark rate by 225 basis points to 12% at an emergency meeting. President Yoweri Museveni, however, rejected the central bank’s proposal to use foreign exchange reserves to support the shilling, saying this would amount to subsidising non-essential imports.
Net foreign currency demand from the energy sector reached $620 million between June and September, up from $360 million a year earlier, according to Enock Nyorekwa Twinoburyo, chief economist at the Uganda Bankers’ Association. Goods imports also rose by 66.5% year on year in August to $2.31 billion. The Bank of Uganda partly attributed the decline to speculative dollar purchases and foreign investors’ withdrawal from government securities denominated in local currency.
The new level follows the shilling’s 14.68% fall against the dollar since January, reported on 24 October.
