Shilling still sliding
Apr 17, 2005
THE Uganda shilling resumed its downward slide last week, weighed down by continued dollar demand to finance dividend remittances abroad, currency traders said on Friday.<br>
By Paul Busharizi
THE Uganda shilling resumed its downward slide last week, weighed down by continued dollar demand to finance dividend remittances abroad, currency traders said on Friday.
An early week spike in dollar demand by oil companies, also added to the shilling’s weakening against the dollar to sh1,775/90 from sh1,760/70, the previous week.
“Low export inflows failed to match dollar demand used to finance dividend remittances.
“At the beginning of the week, oil companies weighed in buying dollars in reaction to rising oil prices,†dfcu bank’s senior dealer, David Bagambe, said.
In the previous week, oil prices touched historical highs before falling back.
The central bank entered the market to sell dollars, a move, which temporarily eased pressure on the shilling.
Indications are the shilling will stabilise this week, dealers said.
“The recent huge dollar demand is a one-off.
“We expect the shilling to correct itself gaining strength to stabilise at 1,750,†Bagambe said.
He said a Bank of Uganda intervention early this week, was anticipated.
The shilling has for the past three weeks always been moving up and down.
THE Uganda shilling resumed its downward slide last week, weighed down by continued dollar demand to finance dividend remittances abroad, currency traders said on Friday.
An early week spike in dollar demand by oil companies, also added to the shilling’s weakening against the dollar to sh1,775/90 from sh1,760/70, the previous week.
“Low export inflows failed to match dollar demand used to finance dividend remittances.
“At the beginning of the week, oil companies weighed in buying dollars in reaction to rising oil prices,†dfcu bank’s senior dealer, David Bagambe, said.
In the previous week, oil prices touched historical highs before falling back.
The central bank entered the market to sell dollars, a move, which temporarily eased pressure on the shilling.
Indications are the shilling will stabilise this week, dealers said.
“The recent huge dollar demand is a one-off.
“We expect the shilling to correct itself gaining strength to stabilise at 1,750,†Bagambe said.
He said a Bank of Uganda intervention early this week, was anticipated.
The shilling has for the past three weeks always been moving up and down.