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Morning All, Angalieni USD inavyopaa
Our rates for today 24 April 2015:
| Currency | Buy | Sell |
| USD | 1945 | 1970 |
| USD Sml | 1935 | 1965 |
| USD 1,2 | 1500 | 1965 |
| EUR | 2040 | 2120 |
| GBP | 2790 | 2950 |
| ZAR | 150 | 165 |
| KES | 19.6 | 20.3 |
| UGX | 0.5 | 0.65 |
THE shilling continued to weaken against the US dollar on Monday, maintaining its downward trajectory against major currencies.
Financial analysts said the struggling of the local currency was due to an increased demand for the US dollars from the energy sector and big oil importers.
It is anticipated that the shilling will continue to suffer against the dollar unless there is sufficient inflow of the greenback to withstand its growing demand.
According to Standard Chartered Bank said the shilling continued to suffer losses against the dollar last week as dollar demand exceeded inflows by far.
“We anticipate the local currency to again suffer the same fate this week unless the market sees significant dollar inflows sufficient to cover current demand,” the bank said in its daily market outlook report.
At midday on Monday NMB quoted the shilling at 1715/1842 against the dollar. It traded on the same level with the dollar on Saturday.
CRDB bank said in its daily financial market highlights that the shilling depreciated against the greenback during early trading hours of yesterday from 1772/1782 to 1780/1790.
Meanwhile, the Kenyan shilling was unchanged on Monday as firms prepared to pay their monthly taxes, curbing demand for foreign exchange. At 0655 GMT, commercial banks posted the shilling at 91.45/55 per dollar, unchanged from Friday’s close. “This is explained by taxes going out tomorrow.
We might see demand (for dollars) come off until the tax payments go through,” said a trader with a commercial bank. The trader added demand could pick up afterwards as importers buy dollars towards the end of the month to meet their obligations.
The shilling is down 1.22 per cent this year mainly due to a broadly firmer dollar. Authorities asked the International Monetary Fund (IMF) for a precautionary loan of about $750 million last week to help them deal with any shocks in the future.
In Kampala, the Uganda Shilling depreciated touching a record low of 2,895/2,905 despite the Central Bank’s intervention in an effort to stem the trend.
Bank of Uganda director for research Adam Mugume said: “A total of $80 million (about Shs 232 billion) was injected into the market in the first two weeks of January.”
He, however, added: “The intervention was basically to control the level volatility and not to control the depreciation.? Analysts, however, say robust demand from telecommunications, manufacturing, oil and energy firms, coupled with offshore names exiting local assets, has far outstripped supply, leading the market prices to move up.
Standard Chartered Bank head of financial market James Mutuku said: “The Shilling has so far dropped just about 4 per cent in 2015 and looks set to remain weak as the year progresses.”
“The Central Bank announced last week their interest to ensure orderly price movements in the market and we expect them to take measures to achieve that,” Mr Mutuku added.
Experts predict the US dollar-Uganda shilling to trade in the 2870-2915 range in the coming week with the possibility of appreciating in the medium term.
Looking at other currencies, the Kenya shilling registered a slight depreciation closing 91.50/60 from the previous close of 91.15/25 last week.
At the monetary policy committee meeting, the Central Bank Rate was held at 8.50 per cent, with the Banks Reference Rate KEBRR (for pricing commercial loans) set at 8.54 per cent from 9.13 per cent. With Uganda’s economy mainly dependent on imports, the Shilling depreciation means traders are now spending more to buy the dollars thus making the cost of doing business high.
However, experts believe dropping international oil prices will see Uganda’s oil import bill declining. “Uganda spends on average $100-125 million (about Shs365 billion) per month on oil related imports; this could decline by 50 per cent in the coming months, which would give boost to trade balance,” Dr Mugume observed.
Furthermore, since oil is an input in several economic activities such as transportation, this would result in lowering of input costs to the production process.
On the negative side, however, Uganda is a prospecting producer of oil and therefore this could derail the investment prospects in the oil sector.
Financial analysts said the struggling of the local currency was due to an increased demand for the US dollars from the energy sector and big oil importers.
It is anticipated that the shilling will continue to suffer against the dollar unless there is sufficient inflow of the greenback to withstand its growing demand.
According to Standard Chartered Bank said the shilling continued to suffer losses against the dollar last week as dollar demand exceeded inflows by far.
“We anticipate the local currency to again suffer the same fate this week unless the market sees significant dollar inflows sufficient to cover current demand,” the bank said in its daily market outlook report.
At midday on Monday NMB quoted the shilling at 1715/1842 against the dollar. It traded on the same level with the dollar on Saturday.
CRDB bank said in its daily financial market highlights that the shilling depreciated against the greenback during early trading hours of yesterday from 1772/1782 to 1780/1790.
Meanwhile, the Kenyan shilling was unchanged on Monday as firms prepared to pay their monthly taxes, curbing demand for foreign exchange. At 0655 GMT, commercial banks posted the shilling at 91.45/55 per dollar, unchanged from Friday’s close. “This is explained by taxes going out tomorrow.
We might see demand (for dollars) come off until the tax payments go through,” said a trader with a commercial bank. The trader added demand could pick up afterwards as importers buy dollars towards the end of the month to meet their obligations.
The shilling is down 1.22 per cent this year mainly due to a broadly firmer dollar. Authorities asked the International Monetary Fund (IMF) for a precautionary loan of about $750 million last week to help them deal with any shocks in the future.
In Kampala, the Uganda Shilling depreciated touching a record low of 2,895/2,905 despite the Central Bank’s intervention in an effort to stem the trend.
Bank of Uganda director for research Adam Mugume said: “A total of $80 million (about Shs 232 billion) was injected into the market in the first two weeks of January.”
He, however, added: “The intervention was basically to control the level volatility and not to control the depreciation.? Analysts, however, say robust demand from telecommunications, manufacturing, oil and energy firms, coupled with offshore names exiting local assets, has far outstripped supply, leading the market prices to move up.
Standard Chartered Bank head of financial market James Mutuku said: “The Shilling has so far dropped just about 4 per cent in 2015 and looks set to remain weak as the year progresses.”
“The Central Bank announced last week their interest to ensure orderly price movements in the market and we expect them to take measures to achieve that,” Mr Mutuku added.
Experts predict the US dollar-Uganda shilling to trade in the 2870-2915 range in the coming week with the possibility of appreciating in the medium term.
Looking at other currencies, the Kenya shilling registered a slight depreciation closing 91.50/60 from the previous close of 91.15/25 last week.
At the monetary policy committee meeting, the Central Bank Rate was held at 8.50 per cent, with the Banks Reference Rate KEBRR (for pricing commercial loans) set at 8.54 per cent from 9.13 per cent. With Uganda’s economy mainly dependent on imports, the Shilling depreciation means traders are now spending more to buy the dollars thus making the cost of doing business high.
However, experts believe dropping international oil prices will see Uganda’s oil import bill declining. “Uganda spends on average $100-125 million (about Shs365 billion) per month on oil related imports; this could decline by 50 per cent in the coming months, which would give boost to trade balance,” Dr Mugume observed.
Furthermore, since oil is an input in several economic activities such as transportation, this would result in lowering of input costs to the production process.
On the negative side, however, Uganda is a prospecting producer of oil and therefore this could derail the investment prospects in the oil sector.
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