Ugandan Shilling Sinks Further

The shilling continues to sink much further against the dollar standing at Shs3, 500.22 on the buying side and Shs3, 510.22 on the selling side.

The local unit has since beginning of the year faced serious battering in the face of reducing dollar inflows, strong recovery of the US economy and the continued crisis in the Euro Zone.

Export inflows, remittance, and tourism receipts have all fallen, which has had adverse effects on the shilling.

Other economic fundamentals have also shown signs of volatility with inflation rising to 4.9 per cent and interest rates averaging at 23 per cent.

Fuel prices have also risen to a market average of Shs3, 700 up from Shs3, 400 last month as a result of the weak shilling.

The governor Bank of Uganda governor Emmanuel Tumusiime Mutebile said the Central Bank risked depleting its reserves if it attempted to inject dollars in the currency market with a view of propping up the shilling.