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
Coordinating office to monitor Ugandans
Ugandans living in the diaspora are to set up a coordinating office that will help monitor their investments back home....
URA breaks 4-year jinx to post sh24.3b surplus
The Uganda Revenue Authority posted a sh24.3b tax collection surplus between July and December 2014, for the first time in more than four years, credited to strict tax controls and administration....
Pension arrears to be cleared this year
RETIRED civil servants will have their gratuity and pension arrears paid before the end of this financial year, thanks to the stringent reforms that have seen the finance ministry save over sh200b...
Automation improves revenue collection by 21%
OVERALL automation and adaption of online tax systems have pushed up revenue collection up by 21% in the last two years, the tax authority has revealed...
Minister Kyambadde urges farmers to join cooperatives
The minister of trade, industry and cooperatives Amelia Anne Kyambadde has called on Ugandan farmers to form or join cooperative societies...
Uganda to get income status by 2018
THE Ugandan economy is three years away from attaining low middle-income status if the second phase of the national development plan is well implemented...
Is gambling the cause of poverty amomg youth?
Yes
No
Can't Say
follow us
subscribe to our news letter