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Wednesday,August 05,2020 14:24 PM

BOU blocks shilling rise

By Vision Reporter

Added 14th December 2000 03:00 AM

THE Bank of Uganda (BOU) on Tuesday bought dollars from commercial banks to stop the value of the shilling from appreciating.

THE Bank of Uganda (BOU) on Tuesday bought dollars from commercial banks to stop the value of the shilling from appreciating.

By Steven Odeu THE Bank of Uganda (BOU) on Tuesday bought dollars from commercial banks to stop the value of the shilling from appreciating. The shilling had gained value against major foreign currencies. By the close of last week, it was trading between sh1,700 buying and sh1,710 selling per US dollar. Yesterday afternoon, it depreciated to sh1,735 buying and sh1,745 selling in most forex bureaux. Indications are that BOU bought some dollars at rates in the range of sh1,755/1,760. The total amount bought by the BOU is unknown. "The BOU presence in the market to buy dollars may attract more players as the shilling begins to slowly depreciate again," said Assistant Manager Prime Forex Bureau, Said Wamala. He said the BOU asked for dollar offers at a time when both commercial banks and forex bureaux lacked the shilling. There was a rush to sell the dollars in order to improve their liquidity positions, thus creating a shortage of dollars. The shilling has in the past three weeks recorded impressive gains after BOU intervened and because of the continued shortage of the shilling. Until yesterday, the shilling had been appreciating against the dollar and Pound Sterling. Mid last month, it traded at sh1,855 buying and 1,860 for selling in Kampala while the pound sterling posted between sh2,640 and 2,680. The depreciation of the shilling had raised fears that it could hit the sh2,000 mark per dollar by the end of the year. The persistent downward trend of the shilling since the beginning of this year was attributed to the Bwindi tragedy mid last year, which scared away tourists, the fish ban by the European Union and the fall of coffee prices on the international market. Ends.

BOU blocks shilling rise

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