Shilling Flat Against Dollar, Diaspora May Help Strengthen Shilling

Sunday, December 12, 2010
By ugandansabroad


By Rebecca Harshbarger

Last week, the Ugandan shilling finished on Monday at sh2305 to the U.S. dollar.  On Tuesday, it rose against the dollar to sh2311, then fell on Wednesday to sh2308.  On Thursday, the shilling finished again at sh2308, and on Friday it fell slightly against the dollar, finishing at sh2305, where it had started at the beginning of the week.

Jaluo Dot Kom.

On Monday, the Ugandan shilling finished against the British pound sterling at at sh3622 shillings, and dropped to sh3640 shillings on Tuesday.  On Wednesday, the shilling fell further against the British pound, finishing the afternoon at sh3648.  On Thursday, the shilling gained against the pound, with one pound worth sh3641.  On Friday, the pound rose slightly against the Ugandan shilling, worth sh3642, or 20 shillings more than Monday.

Throughout the week, one Kenyan shilling was worth about 28 Ugandan shillings, finishing on Monday at 28.6, rising to 28.7 on Tuesday, then sliding back to 28.6 on Friday.

“We’re having some corporate demand coming in and this is keeping the shilling in a weak position,” Faisal Bukenya, head of market making at Barclays Bank Uganda, told Reuters last Wednesday.

There has been a strong corporate demand for dollars in Uganda in the past two months, and the central Bank of Uganda has had a hard time getting the shilling below sh2300. In November, the central bank sold $15 million to relieve pressure on the Ugandan shilling.

Traders hope that year-end remittances from Ugandans in the diaspora might weaken the dollar, and help the Ugandan shilling strengthen.

In Kenya, there has been low demand for dollars, and the Kenyan strengthened .8 percent against the U.S. dollar, to 79.82 shillings.  The Kenyan shilling is expected to strengthen further as Christmas approaches.

Last Wednesday, the Central Bank of Kenya bought $5 million Euros, and said on Friday that it would stay out of the foreign-exchange market, according to reporting by Bloomberg.

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One Response to “Shilling Flat Against Dollar, Diaspora May Help Strengthen Shilling”

  1. [...] from the Ugandan diaspora during the festive season will help stabilize the shilling, according to reporting by Ugandans Abroad. // If you find this information helpful, [...]

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