The shilling pulled a surprise move on Thursday, flexing its muscles against the dollar. Traders reported that steady coffee inflows combined with low dollar demand from corporations gave the local currency a much-needed boost. By the end of the day, the Uganda shilling stood tall at 3685/3695 levels, a commendable leap from the day’s opening of 3693/3703.
Uganda Shilling Performance on Thursday
| Session Time | Opening Rate (UGX/USD) | Closing Rate (UGX/USD) |
|---|---|---|
| Morning | 3693/3703 | 3685/3695 |
In the money markets, liquidity was the word of the day. It was like a Kampala traffic jam during rush hour—everyone had somewhere to go, and it was up to the Central Bank to clear the way. Enter the Bank of Uganda (BoU) with its trusty mop-up repo and a fresh batch of BoU Bills, ready to soak up the excess liquidity. By the end of the operation, a hefty sh314 billion had been mopped out.
Central Bank Mop-Up Operation
| Operation Type | Duration | Amount Mopped (UGX) |
|---|---|---|
| Mop-Up Repo | 7 days | 314 billion |
| Issuance of BoU Bills | – | – |
While the global dollar strutted around like a peacock, Ugandan corporations were more interested in sipping their coffee and staying put. The subdued dollar demand from these corporations was like a collective shrug, leaving the dollar to sulk in the corner while the shilling basked in the spotlight.
Factors Influencing Shilling Strength
| Factor | Impact on Shilling |
|---|---|
| Coffee Inflows | Positive |
| Corporate Dollar Demand | Negative |
In a country where a strong shilling can mean the difference between affording school fees and tightening belts, this news is more than just financial jargon—. The gains may seem modest, but in the current economy, every thread counts.
