The Ugandan shilling has continued to appreciate against the US dollar despite economic volatility caused by the Covid-19 induced lockdown.
In the month of June 2021, the shilling traded at an average mid-rate of Shs 3,540/USD in June 2021 compared to Shs 3,553/USD in May 2021, translating into a 0.3% appreciation.
“During the month of June 2021, the Ugandan shilling continued to face appreciation pressures. The shilling gained by 0.3% against the USD, trading at an average mid-rate of Shs 3,540/USD in June from Shs 3,553/USD recorded in May 2021,” the June 2021 monthly report by the Ministry of Finance, Planning and Economic Development indicates.
According to Ministry of Finance, Planning and Economic Development, the Shilling’s appreciation was on account of the increased inflows mainly from offshore investors into the government securities market.
“The Ugandan shilling also posted 1.2% and 0.4% appreciations against the Euro and Pound Sterling respectively,” the statement said.
Since late 2020, the Uganda shilling has registered improved performance despite the Covid-19 pandemic that affected foreign exchange inflows, especially the tourism receipts.
Bank of Uganda says on average, the shilling depreciated by 0.38 per cent in 2020 compared to an appreciation of 0.6 per cent in 2019.
“The relative stability is partly a reflection of subdued aggregate demand. The shilling depreciated by 3 per cent between February and May 2020 but appreciated by 3.3 per cent between May and December 2020,” Bank of Uganda said recently.