The Ugandan shilling strengthened the most in almost seven weeks after the central bank unexpectedly raised its key lending rate for the first time since 2011.
The currency advanced 0.7 percent to 2,575.5 per dollar by 4:30 p.m. in the capital, Kampala, the biggest gain since July 19 on a closing basis, according to data compiled by Bloomberg.
The Bank of Uganda increased its policy rate to 12 percent from 11 percent, Governor Emmanuel Tumusiime-Mutebile told reporters today in Kampala, the capital. Two economists surveyed by Bloomberg forecast the rate would remain unchanged. It was the first increase since November 2011.
“For a long time the Ugandan shilling was not getting the respect it should have been given and this is partly a response to that,” Aly-Khan Satchu, chief executive officer of Rich Management Ltd., a Nairobi-based adviser to companies and high net-worth individuals, said by phone. “The shilling has more room to strengthen.”