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
ERA licenses 9 renewable energy projects
An additional 9 renewable electricity plants, some under the Global Energy Transfer for Feed-in-Tarrifs (GET-FiT) programme, have been licensed to generate 132.7MW to boost Uganda’s transformation into an upper middle class country....
Pump attendants tipped on safety standards in case of fire
Vivo Energy, the company that distributes and markets Shell branded fuels and lubricants has conducted a fire drill to test the response preparedness by staff at Shell Service Stations in case of a fire outbreak. The drill was conducted at Shell Kira Road located at the Bukoto white flats....
UAE Exchange customer wins Xpress Money ‘Win Big’ second weekly draw
Xpress Money recently announced the second weekly draw winner of its ongoing promotion – Win Big. Ms. Ann Minviluz Banquerigo, a customer of UAE Exchange, Lugogo Mall branch, won herself a prize money of UGX 250,000 by simply sending money using Xpress Money services....
Total CEO de Margerie killed in Moscow as jet hits snow plough
MOSCOW - The chief executive of French oil major Total, Christophe de Margerie, was killed when his private jet collided with a snow plough as it was taking off from Moscow's Vnukovo airport on Monday night....
Govt to identify key opportunities for growth
THE Government and World Bank are preparing a joint ‘Country Economic Memorandum’ report, which will identify key opportunities and challenges to accelerating socio-economic transformation...
Business guide in conflict resolution developed
A business guide for the business community to resolve conflicts without resorting to courts of law has been developed....
Was Oscar Pistorius' 5 year sentence fair and just?
Yes
No
Can't Say
follow us
subscribe to our news letter