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Ugandan shilling falling further

By Julius Businge

The Ugandan shilling fell against foreign currencies notably the dollar on Wednesday, dealers said. Commercial banks quoted the currency of Africa’s largest coffee exporter at 2,587/2,597, weaker than Tuesday’s close of 2,575/2,585.

“There is some depreciation of the local currency as a result of better liquidity conditions but inflows into Umeme’s IPO will probably push (strengthen) it up again,” Robert Aloo, head of treasury at KCB Bank told Reuters.

Umeme Ltd, owned by Actis, the UK’s emerging market private equity investor, is offering 38.3 percent of its issued share capital in the Initial Public Offering (IPO) which started on Oct. 15 and ends on Nov. 7.

Last week traders said, the currency was largely stable trading in the narrow range of 2575-85. The market saw matched interest with flows equally taken out by sizeable demand from the manufacturing sub-sector.

Denis Mashanyu, forex trader at Standard Chartered Bank Uganda said yields on treasuries inched up after the rally in the recent months mainly due tightness in the cash markets.

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