The Independent (Kampala)

Uganda: Local Shilling On Back Foot

The Uganda Shilling was on the back foot through the week [Sept. 17 to 21] closing on the weak note at 2520/30 from the 2500/10 a week earlier.

Denis Mashanyu, forex trader at Standard Chartered Bank said the market saw a sizeable demand for foreign currencies especially the US Dollars with very little supply as offshore investors continued to shy away from the debt market due low yields. Mashanyu said treasuries firmed in the midweek auction with a strong appetite from onshore players.

Analysts say the performance of the Uganda shilling in the near term will partly depend on the market conditions in foreign economies. They say while the risk of an extreme crisis in the Euro Zone seems to have receded for now, a continued rise in the Euro could be negative for the Euro Zone's economy and that is one reason to be cautious about the single currency's outlook.

Mashanyu said with further easing expected by the central bank, the shilling will continue to weaken though gradually. "Expected trading range is 2500-50 in the medium term," he said.

Ads by Google

Copyright © 2012 The Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.