Shilling dips further
Jun 04, 2006
THE shilling continued to slide against the dollar closing down at 1,856/1,861 on Friday from 1,846/1,851 at Monday’s opening amid expectations that Bank of Uganda (BOU) would intervene, dealers said.
By Kelvin Kizito
THE shilling continued to slide against the dollar closing down at 1,856/1,861 on Friday from 1,846/1,851 at Monday’s opening amid expectations that Bank of Uganda (BOU) would intervene, dealers said.
Dealers expressed fears that the local unit could fall to 1,862/1,872 per dollar, if corporate demand escalates this week, unless BOU intervened.
However, a BOU source dampened the fears, saying the depreciation was expected and cyclical.
“The fiscal year is coming to an end and many corporates, including major banks, are closing their books for the year and paying dividends,†the source said.
Siraj Pardesi, the Crane Bank’s forex dealing manager, attributed the shilling’s escalating slide to increased corporate demand.
“The market is still high although it was not very active this week,†he said.
Standard Chartered Bank’s senior forex dealer, Joram Ssozi, said the shilling slowly continued to depreciate with no intervention from BOU.
Many banks were seen bidding and paying high for dollars to cover short positions created in anticipation of an intervention.
“On the corporates side, many are still hoping for better rates,†he said.
THE shilling continued to slide against the dollar closing down at 1,856/1,861 on Friday from 1,846/1,851 at Monday’s opening amid expectations that Bank of Uganda (BOU) would intervene, dealers said.
Dealers expressed fears that the local unit could fall to 1,862/1,872 per dollar, if corporate demand escalates this week, unless BOU intervened.
However, a BOU source dampened the fears, saying the depreciation was expected and cyclical.
“The fiscal year is coming to an end and many corporates, including major banks, are closing their books for the year and paying dividends,†the source said.
Siraj Pardesi, the Crane Bank’s forex dealing manager, attributed the shilling’s escalating slide to increased corporate demand.
“The market is still high although it was not very active this week,†he said.
Standard Chartered Bank’s senior forex dealer, Joram Ssozi, said the shilling slowly continued to depreciate with no intervention from BOU.
Many banks were seen bidding and paying high for dollars to cover short positions created in anticipation of an intervention.
“On the corporates side, many are still hoping for better rates,†he said.