Business
Shilling weakens, pressured by growth forecast cutPublish 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
UIA partners with UNRA to develop roads in industrial parks
SINCE opting for the private sector-led growth strategy to spearhead the attainment of Uganda’s growth and development aspirations, the government has, beyond its traditional policy and regulatory role...
Entrepreneurs’ bus comes to Uganda and East Africa
Entrepreneurs’ bus comes to Uganda and East Africa By Billy Rwothungeyo The AMPION Venture Bus this year makes its debut in Uganda and the other East African countries of Kenya, Rwanda and Tanzania....
Businesses cautioned on cyber- crime rise in Uganda
Three Police disciplinary units are in Rwenzori region in western Uganda to hear cases of security personnel accused of poor response to the July 5 attacks that claimed at least 92 lives in Bundibugyo, Ntoroko and Kasese districts....
Makerere University kitchen staff demand sh2.5b terminal benefits
Makerere University kitchen staff, recently redeployed to other departments by the administration, have petitioned court demanding sh2.5b terminal benefits....
Blacklisted contractor petitions court over PPDA suspension
A blacklisted contractor has petitioned court over a three-year suspension penalty by the Public Procurement and Disposal of Public Assets Authority (PPDA)....
National Housing signs pact for affordable houses
National Housing and Construction Corporation (NH&CC) has signed a loan agreement with Shelter Afrique, to provide housing to the rising middle-income class in Kampala district....
With the recent increase of the HIV prevelance rate, Is Uganda losing the fight against the disease?
Yes
No
Can't Say
follow us
subscribe to our news letter