(Kampala) – The Ugandan shilling finished the week trading stronger against the dollar, bolstered by commodity and remittance inflows that exceeded corporate demand. The local currency closed at 3,655/3,665, compared to its opening rate of 3,665/3,675 earlier in the day, showing a slight improvement.
Overall, the shilling experienced a slight depreciation over the week. It had opened at 3,656/3,666 at the beginning of the week but later strengthened due to increased foreign currency inflows. The current exchange rate improvement highlights increased foreign remittances and steady demand in Uganda’s commodity sector.
Money markets showed tighter conditions, with the overnight rate trending at an average of 11.43%, according to a report from Absa Bank.
Globally, the US dollar surged on Wednesday following Donald Trump’s victory in the U.S. presidential election. The dollar continued to perform strongly against other major currencies. In response to economic conditions, the Federal Reserve cut interest rates by 25 basis points on Thursday, adjusting the Fed Funds Rate to a range of 4.5% to 4.75%. Fed Chair Jerome Powell stated that recent political outcomes would not immediately affect the central bank’s monetary policy, aiming to assure financial markets.
| Currency Movements | Exchange Rate |
|---|---|
| Opening Rate (Week) | 3,656/3,666 |
| Closing Rate | 3,655/3,665 |
| Overnight Rate | 11.43% |
| Fed Funds Rate | 4.5% – 4.75% |
