Business
Shilling weakens, pressured by growth forecast cut
Publish Date: May 03, 2014
Shilling weakens, pressured by growth forecast cut
  • mail
  • img
newvision

KAMPALA - The Ugandan shilling fell on Friday, sapped by demand from energy and manufacturing firms and on reduced growth expectations after the central bank cut its forecast for economic output.

Commercial banks quoted the currency at 2,525/2,535 down from Wednesday's close of 2,515/2,525.

Ugandan markets were closed for Labour Day on Thursday.

"The market is receiving a lot of end month-related demand from the manufacturing and energy sectors," said Shahzad Kamaluddin, a trader at Crane Bank.

Also, "the central bank's new forecast for growth signals the economy isn't doing very well... that's not good news for the shilling."

Earlier on Friday, Bank of Uganda cut its growth forecast for the 2013/14 fiscal year to 5.7 percent from 6 percent while holding the benchmark interest rate at 11.5 percent.
 
David Bagambe, a trader at Diamond Trust Bank Uganda, said the shilling was also being undermined by market expectations of a slowdown in hard currency flows from offshore investors.

"Rates are going down and we don't think demand for Ugandan debt from foreign investors will remain the same," he said.

"... We expect a dip in inflows from these people which inevitably will hit the shilling."

At a Treasury bill auction worth 120 billion Ugandan shillings this week, the weighted average yield fell across all maturities.

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
How to widen Uganda’s tax base in a large subsistence economy
Uganda’s tax base remains small and the country is grappling with measures on how to widen the tax base in light of decreasing donor funds and pressures to finance the national budget....
UAE Exchange Uganda observed World Food Day
UAE Exchange, the leading global remittance, foreign exchange and payment solutions brand observed World Food Day on 16th October. This year the theme was Family Farming: “Feeding the world, caring for the earth”...
Nigerian cleric warns Uganda over oil curse
Rev Father Edward Obi, a leading civil society activists fighting against the effects of the oil curse in Nigeria has warned Uganda that since oil has been discovered Ugandans are not safe from the negative effects the resource brings....
Oil to spur capital markets – Nsamba
This year marks 18 years since the Capital Markets Authority (CMA) was formed....
UBOS releases Producer Price Index
THE indices for hotels and restaurants indicate that annual prices for hotel services fell by 2.5 percent during the period of April, May and June 2014, compared to the same period in 2013...
KCCA shuts down House of Eden
KAMPALA Capital City Authority (KCCA) together with Uganda National Bureau of Standards have closed House of Eden that manufactures Safi juice and Azur water for allegedly using expired raw materials...
Should the absence of bride price prevent couples from wedding?
Yes
No
Can't Say
follow us
subscribe to our news letter