Uganda’s Shilling Declines to 18-Year Low on Corporate Demand for Dollars

Uganda’s shilling, the world’s third worst-performer this year, declined to the lowest in at least 18 years against the dollar, driven by corporate demand for the U.S. currency.

The shilling fell 1.4 percent to 2,733 per dollar at 4.50 p.m. in the capital, Kampala, the lowest intraday level since at least June 22, 1993, according to Bloomberg data. It closed at 2,695 yesterday.

“The weakening was caused by huge demand for the dollar by one of the corporate firms against low inflows,” Lucas Ochieng, a currency trader at Orient Bank Ltd. said by phone from Kampala without giving details.

A surge in food and fuel prices pushed inflation to a more than 18-year high of 18.7 percent last month from 15.7 percent in June, the Uganda Bureau of Statistics said on July 29.

The currency of Africa’s second-biggest coffee producer has slumped 15.5 percent this year, the steepest decline after the Maldives rufiyaa and Suriname dollar, which fell 16.5 percent and 16.8 percent, respectively.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

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