Uganda news update – Shillling falls to record low until Central Bank intervenes


Pressure, presumably caused by widespread external and internal speculation, continued to drive the Uganda Shilling downwards, and causing it to fall substantially into the unprecedented 2.700 range against the US Dollar. This in turn prompted finally an intervention by the country’s central bank, the Bank of Uganda, which reportedly purchased excess Dollars from the market to the tune of nearly 100 million, bringing the halt to a standstill before driving the shilling back into the high 2.400 range.

Currency dealers however seem to count on a further slide again, as the Bank of Uganda also raised interbank interest rates by 1 full percent, struggling at once against inflation, still raging in the 15 percent range inspite of lower food prices, and the ongoing devaluation of the currency.

Tourists were also reported to have argued over the suddenly reduced rates of exchange, following the central bank intervention and appeared angry ‘feeling cheated’ as two put it on closer questioning, saying the day before they were getting 2.700 plus shillings and were told it might get better for them only to find the rate had dropped by over 200 shillings overnight.

Tanzania and Kenya too suffered recent slides in their currency values vis a vis the US Dollar and other hard currencies while Rwanda in stark contrast appears to be holding on better, inflation wise and devaluation wise compared to her East African partners.

Watch this space.