Kampala, Uganda | THE INDEPENDENT | The value of banknotes and coins issued for circulation increased by 272 billion shillings last financial year as Bank of Uganda responded to increased withdrawal of money by the commercial banks.
In a 2018/19 annual report, the central bank reports that new banknotes in circulation increased by 263 billion Shillings from 4.16 trillion Shillings in 2017/18 to 4.42 trillion Shillings in 2018/19. Coins, on the other hand, increased by 10.03 billion Shillings to 177.1 billion Shillings in 2018/19 financial year compared to 167 billion Shillings, a year before.
The central bank says in the report that the increase in the value of the currency in circulation in 2018/19 resulted from increased commercial banks’ withdrawals of banknotes and coins from the central bank. This exceeded the money they deposited there by 272.9 billion shillings.
This reflected the public’s increased demand for money to finance their economic activities, BOU says. It also means that more people or businesses asked and received loans to do their activities.
BoU reports that commercial banks withdrew 8.8 trillion Shillings in 2018/19 and they only deposited 8.5 trillion Shillings.
The central bank issues new notes and coins as and when it feels they are needed.