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
Fastjet launches new regional route
FASTJET Tanzania Airline has officially launched its newest flight between Kilimanjaro, Tanzania and Entebbe Airport...
Police impounds 80 tons of imature fish
POLICE in Arua together with the regional fisheries officers’ law enforcing officers impounded over 80 tons of immature smoked fish worth sh600m...
Skills development key in boosting informal sector
Building capacity through skills development is the only way to address the escalating poverty and unemployment levels, the Academic Registrar Management Training and Training Centre (MTAC) has disclosed....
How to grow onions
Onions can be grown in a wide range of climatic conditions; they are quite hardy and can tolerate temperatures as low as -6°c....
Uganda aims to promote tourism through sports
AFTER the land mark Kabale inaugural sports tourism proved successful, the East Africa Sports Tourism Initiative the organizers have announced that the event will be held annually...
How to grow water melon
The watermelon is a special kind of berry also known as Pepo from the cucurbitaceace family....
Should African countries expel South Africans?
Yes
No
Can't Say
follow us
subscribe to our news letter