Uganda’s shilling lost ground against the dollar after earlier gains by the shilling prompted increased buying of the U.S. currency.
The currency of East Africa’s third-biggest economy earlier rose as much as 1.9 percent to 2,560 per dollar before trading down 0.2 percent at 2,611 at 2:55 p.m. in the capital, Kampala, according to data compiled by Bloomberg.
“We saw a bit of interbank selling of the dollar in the morning leading to the shilling gains,” Faisal Bukenya, the head of currency trading at Barclays Bank Uganda Ltd. said by phone from Kampala. “Then some people came in buying the dollar, reversing the gains.”
Uganda’s shilling, which reached 2,897.50 on Sept. 23, the weakest since June 1993, declined almost 12 percent against the dollar this year. A surge in food and fuel prices pushed annual inflation to a more than 18-year high of 30.5 percent in October from 28.3 percent in September, according to the Uganda Bureau of Statistics.