Uganda Shilling Weakest Against the Dollar in Two Years

1295 Views Kampala, Uganda

In short
According to Stephen Kaboyo of Alpha Capital Partners, which watch the market, the shilling was under immense pressure on account of strong demand from the inter-bank, as commercial banks rushed to cover their short positions.

The shilling this week slumped against the US dollar, getting to its weakest point in two years.

The shilling shifted from its stable range of 3,600 and traded in the range of 3,645/3,655, for the first time in two years.
  
According to Stephen Kaboyo of Alpha Capital Partners, which watch the market, the shilling was under immense pressure on account of strong demand from the inter-bank, as commercial banks rushed to cover their short positions.
  
Kaboyo says significant demand was also seen from the energy, manufacturing and importers. By close of the week the shilling registered a modest rebound from its earlier losses as demand receded.
  
Kaboyo forecasts that the shilling will remain volatile as pockets of demand continue to play out coupled with an undercurrent of negative sentiment on account of domestic and regional political developments.
  
The Kenyan Shilling was also under pressure due to negative sentiments around the planned repeat presidential election and the deteriorating political and security situation in Uganda's biggest trading partner.
  
Kaboyo says the anxiety kept the markets on the edge and the central bank of Kenya intervened and sold dollars in order to calm the markets.

The last time the shilling breached the 3,650 mark was in the last quarter of 2015 on account of prolonged drought and upsurge of conflict in South Sudan, then Uganda's biggest trading partner.
  
Speaking to the media Thursday, Uganda's Secretary to the Treasury Keith Muhakanizi said the Kenyan political turbulence is not yet having any significant effects on Uganda.
 
 
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About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."