Uganda’s Shilling Slips to Weakest in 18 Years on Dollar Demand
Uganda’s shilling, the world’s worst-performing currency against the dollar this year, weakened to an 18-year low, driven by demand for the U.S. currency by oil importers and telecommunication companies.
The currency of East Africa’s third-biggest economy depreciated 1.3 percent to 2,780 per dollar at 3:56 p.m. in the capital, Kampala, the weakest level since June 1993, according to Bloomberg data.
“We have a very lean market and yet there is demand by the fuel sector and telecommunication companies,” Timothy Muzoora, a currency trader at Cairo Bank Ltd., said by phone from Kampala. “Telecommunication companies import equipments and there are remittances they pay.”
Uganda, Africa’s second-biggest coffee producer, is on the cusp of an oil boom with Tullow Oil Plc, a U.K.-based energy company, is expected to start pumping crude and gas from the Lake Albert Basin in 2012. The country has an estimated 2.5 billion barrels of oil, with about 1 billion barrels in proven reserves, according to Tullow.
To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
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