Expert in forex trading is expecting the shilling to recover this week to trade 2470/80 with the topside capped at 2500, said Denis Mashanyu, forex trader at Standard Chartered Bank in a statement released on August 5.
Last week, the shilling weakened slightly against the US Dollar closing 2485/95 from the previous of 2470/80 having tested 2490/00.
Mashanyu said the move resulted from the drop in inflation figure to 14.3% for the month of July which prompted the policy makers to cut the CBR by 200 basis points to 17% down from 19% in August and July respectively.
The exchange rate depreciated rapidly hitting the sh2, 900 mark in September last year largely due to expensive imports from the Euro Zone economies, further amplifying the domestic troubles.
According to Bank of Uganda's monetary policy report for August the exchange rate stood at an average of Shs 2, 474 per US dollar, representing g an appreciation of 0.4% month-on-month and 4.4% year-on-year.
The report says the appreciation was attributed to the inflows from off-shore agents and coffee export proceeds.