The shilling fell to another record low against the dollar on Friday, with market data putting the close at Shs4,405.75, a day after the Bank of Uganda returned to the foreign-exchange market.
The dollar had closed at Shs4,229.29 on Thursday on the same series. It traded between Shs4,282.76 and Shs4,405.75 on Friday.
The bank told commercial banks on Thursday that it was on the selling side of the foreign-exchange market but did not disclose the amount offered or sold.
A trader told Reuters that the sale would absorb some demand but was unlikely to reverse the shilling’s losing trend. Reuters cited strong dollar demand from energy and merchandise importers.
The bank raised its benchmark rate by 225 basis points to 12 per cent on 14 October, but the shilling has since continued to weaken. Thursday’s intervention was the bank’s first public confirmation that it had resumed selling foreign currency after the rate rise.
The market rate is indicative and may differ from commercial-bank quotes and the bank’s reference mid-rate.
($1 = Shs4,405.75, Friday’s market close, Bank of Uganda data)
