Ugandan shilling to weaken further by end of 2017 – Stanbic Bank

Ugandan exchange
U.S dollar will most likely weaken the Ugandan Shilling to 3,900 from the current average of 3,600 by end of this year. Courtesy Photo.

Economists predict that the Ugandan Shilling will most likely weaken significantly by year’s end due to a resurgent dollar against all major currencies.

Jibran Qureishi, the Standard Group Regional Economist for Africa, told the China-Uganda Economic Forum in Kampala that a stronger dollar will most likely weaken the Shilling to 3,900 from the current average of 3,600.

Standard Bank is the parent company of Stanbic Bank, Uganda’s biggest bank.

According to Qureishi, the depreciation of the Shilling will be due to outflows to the United States which increased interest rates on Wednesday, adding that the strong dollar will affect not only the Shilling but other currencies as well.

Qureishi said 2016 saw many offshore investors coming into the money markets but with a stronger dollar many will most likely move out their monies.

Qureishi said although the Shilling will weaken, it won’t be to the level after the 2011 general election nor that of 2016. Then the Shilling was in free fall against the greenback.

Stanbic Bank Uganda’s Head of Corporate and Investment Banking, Edwin Mucai, said although the Shilling will depreciate that in itself is not bad for economic growth.

The Shilling has been averaging between 3590 on the buy side to 3610 on the sell side for a while.

– Uganda Radio Network