{"id":64202,"date":"2024-01-06T06:41:09","date_gmt":"2024-01-06T06:41:09","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent"},"modified":"2024-01-06T06:45:41","modified_gmt":"2024-01-06T06:45:41","slug":"uganda-shilling-weakens-by-less-than-one-percent","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent","title":{"rendered":"Uganda shilling weakens by less than one percent"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>Although the Uganda Shilling has been volatile, the Bank of Uganda says it depreciated by 0.9 percent in 2023 compared to 2022 when the depreciation was slightly higher.<\/b><\/p>\n

In 2022, the effective rate depreciated year-on year by 1.6 percent which indicated that the Uganda shilling weakened against the weighted basket of currencies of the country\u2019s trading partners.<\/p>\n

The central bank maintains that the Uganda shilling remains relatively stable against the US dollar despite the recent spells of depreciation pressures in the quarter to November 2023.<\/p>\n

In response to questions on the performance of Uganda shilling in 2023, the executive director research Bank of Uganda, Dr Adam Mugume said that the Uganda Shilling was stable in the first eight to nine months of the year, in the range of Shs3,694-3,746 per dollar.<\/p>\n

\u201cHowever, noticeable depreciation pressures emerged in the last quarter of 2023. This was a result of several factors: first, the World Bank announcement of freezing any new project financing in Uganda as a result of the Anti-Homosexuality Act of 2023. This combined with negative rating of Uganda by several rating agencies resulted in negative sentiments which have triggered defensive purchasing of dollars, in absence of strong forward or hedging forex markets,\u201d he said.<\/p>\n

\u201cCompared to the Kenya shilling which depreciated by 17.5 percent; South African Rand depreciated by 12.6 percent; Tanzania shilling depreciated by 3 percent; Rwandese currency routinely more managed witnessed a depreciation of 11.7 percent. However, the Euro and British pound strengthened against the dollar, with respective appreciations of 2.8 percent and 0.7 percent,\u201d he added.<\/p>\n

Factors<\/b><\/p>\n

Explaining other factors that contributed to the depreciation of the shilling in the later part of 2023, Dr Mugume said the decline in international reserves, in part, due to servicing of external debts and inability to purchase forex from the market, meant that BoU couldn\u2019t intervene on the sale side when sharp depreciation pressures emerged due to reasons that weren\u2019t economic fundamentals.<\/p>\n

\u201cThis could have been interpreted by the market participants that BoU is either leaning towards a depreciation or is unable to intervene to tame volatility in the exchange rate due to decline in reserves,\u201d he said.<\/p>\n

Dr Mugume further stated that the economy is slowly gaining traction from Covid-19 effects. As such, demand for forex, for example, to replace the machinery that had been disregarded due to uncertainty and low demand.<\/p>\n

\u201cMost emerging and frontier economies saw their currencies weaken due to global factors. For example, the emerging negative aspects of debt defaults, which could be hurting countries like Uganda. We have continued seeing offshore investors exiting the Ugandan financial market, in part because of attractive yields in safe havens but also because of the elevated fear of debt default,\u201d he said.<\/p>\n

Economy<\/b><\/p>\n

Speaking about the economy, Dr Mugume said the economic growth is projected to strengthen in 2024 and inflation is also projected to remain benign (moderate and steady increase in prices of goods and services over time). This is a solid foundation for FDI inflows projected at about $2.9 billion. This combined with rising export receipts, workers remittances and recovering tourism receipts and fiscal consolidation help the shilling to remain stable.<\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. Although the Uganda Shilling has been volatile, the Bank of Uganda says it depreciated by 0.9 percent in 2023 compared to 2022 when the depreciation was slightly higher. In 2022, the effective rate depreciated year-on year by 1.6 percent which indicated that the Uganda shilling weakened against the weighted basket of currencies […]<\/p>\n","protected":false},"author":84,"featured_media":64201,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7,258],"tags":[233,240,234],"class_list":["post-64202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","category-to-homepage","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nUganda shilling weakens by less than one percent - Uganda<\/title>\n<meta name=\"description\" content=\"Although the Uganda Shilling has been volatile, the Bank of Uganda says it depreciated by 0.9 percent in 2023 compare ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Uganda shilling weakens by less than one percent\" \/>\n<meta property=\"og:description\" content=\"Although the Uganda Shilling has been volatile, the Bank of Uganda says it depreciated by 0.9 percent in 2023 compare ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent\" \/>\n<meta property=\"og:site_name\" content=\"Uganda\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-06T06:41:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-06T06:45:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2024\/01\/sm_1704510674.919271.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Uganda shilling weakens by less than one percent\",\"datePublished\":\"2024-01-06T06:41:09+00:00\",\"dateModified\":\"2024-01-06T06:45:41+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent\"},\"wordCount\":531,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2024\/01\/sm_1704510674.919271.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Uganda\",\"uganda\"],\"articleSection\":[\"all news\",\"economy\",\"head lines\",\"to-homepage\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent\",\"url\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-shilling-weakens-by-less-than-one-percent\",\"name\":\"Uganda shilling weakens by less than one percent - 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