The Uganda shilling continues its upwards spiral even breaching the 3,800 mark. The shilling against the dollar is trading in the range of 3,804/3,824 on the buy and sell sides, creating a new depreciation low for the local currency.
As at June 7, almost all forex bureaus in downtown Kampala were quoting the shilling-dollar exchange rate at over 3,800. This is a new low considering that for the last month it had not breached the Shs 3,800 ceiling.
According to financial market analyst Stephen Kaboyo of Alpha Capital Partners, drivers for the strong dollar include demands by corporations that are reporting their financials.
The Shs 3,800 mark implies increase in cost of imported essentials like fuel which would in turn push up the cost of transportation and productive activities.
Another reason for the depreciating shilling, according to financial experts is rising sentiments ahead of the reading of the 2018/19 national budget.
The upcoming budget stresses revenue mobilisation, by introducing new taxes like on mobile money transactions and use of social media.