The Uganda Shilling has started recovering from some of its last week losses and experts predict further gain after the long awaited PTA Bank loan comes through this week.
In a bid to support the struggling Shilling, last year government embarked on the process of securing a $200 million (Shs690 billion) from the Eastern and Southern African Trade and Development Bank, known as PTA Bank.
In an interview with Daily Monitor yesterday the Permanent Secretary/Secretary to the Treasury, Mr Keith Muhakanizi, confirmed Parliament’s clearance of the PTA loan after Cabinet’s earlier approval.
“The loan was cleared by Parliament and Cabinet and we are already discussing its budgeting,” Mr Muhakanizi said.
Last year the Uganda central bank sold dollars on numerous occasions as means of buttressing the local currency, which had depreciated by about 17 per cent against the dollar in 2015.
Yesterday the Shilling at the Bank of Uganda counter opened business trading at 3433/3443 stronger than it traded on Monday at 3460/3470.
Mr Stephen Kaboyo, the managing partner at Alpha Capital, a forex trading firm, shared: “For the last couple of days the Shilling has shed off some of its losses to trade below the key level of 3450 driven mainly by interbank liquidation of long dollar positions.”
He added that subdued corporate demand due to mid-month tax obligations amidst improved inflows was the other reason behind the Shilling’s gain.
Experts said another key factor that is likely to generate positive sentiment for the Shilling is the coming through of PTA’s $200 million that is expected to hit the government books this week.
Percentage by which the Shilling depreciated last year