Shilling loses grip despite Central Bank intervention

Kampala- Despite Bank of Uganda’s (BoU) intervention to save the situation, the Shilling has continued to depreciate against the dollar.

By close of business yesterday, the BoU counter was quoting the Shilling at 3,209/3,219 lower than it opened the day at 3,180/3,190, a mark it had gained after Tuesday’s intervention.

Experts have expressed fear that this being an elective year, the depreciating Shilling is going to create more problems because more money inflows are expected into the country –worsening the matter.

In an interview, the Kampala City Traders Association chairperson, Mr Everest Kayondo, said: “The sharp depreciation of the Shilling is a terrible episode to our businesses”.

He said according to the recently read budget, Finance Minister Matia Kasaija assured that Uganda had reserves that could sustain the economy up to four months.

Commenting about the impact of the depreciating Shilling on the local production into exports, he said: “This is a big blow to business because even the local production, mostly the manufacturers, are importing 70 per cent of their input.”

In his reaction, the chairman Uganda Manufacturers Association, Mr Amos Nzei, said: “The depreciating Shilling is killing the industries, our costs have increased and because of this, we will soon see an increase in prices of goods produced locally”.

Mr Nzei said because of this, there would be less volume of sales and thus less tax remittances.