Overview:
The increased dollar supply was partly supported by the tight monetary policy stance; higher inflows from coffee exports owing to favourable international coffee prices; increased Foreign Direct Investments (FDIs) in the oil and gas sector and more tourism receipts.
The Uganda Shilling has remained the only currency in the East African region standing strong against the US Dollar.
According to the Performance of the Economy Report for July 2024, the Uganda shilling appreciated by 1.1% against the US Dollar to an average mid-rate of Shs3,705.85/USD, compared to Shs3,747.19/USD in June 2024.
“This appreciation was on account of an increased supply of dollars which outstripped its demand,” the report released on Wednesday reads in part.
The increased dollar supply was partly supported by the tight monetary policy stance; higher inflows from coffee exports owing to favourable international coffee prices; increased Foreign Direct Investments (FDIs) in the oil and gas sector and more tourism receipts.
Additionally, the Shilling appreciated by 0.3% against the Euro but depreciated by 0.1% against the British Pound.
It should be noted that all other currencies in the EAC region depreciated against the USD in July 2024. The Tanzanian and Kenyan Shillings depreciated by 1.2% and 0.5% respectively, while the Rwandan & Burundian Francs weakened by 0.5% and 0.2% respectively.
In June 2024, Uganda traded at a surplus of USD 45.26 million with the rest of the EAC partner states, a shift from the deficit of USD 72.20 million registered the previous month.
Overall, the report indicates there has been continued improvement in the level of economic activity as shown by the high-frequency indicators of economic activity. Similarly perceptions about doing business remained positive and optimistic.