Money and Markets
Ugandan Shilling emerged Africa’s Third Best performing currency amidst the pandemic
Uganda’s shilling has emerged as Africa’s third-best performing currency this year.
In the face of Economic challenges internally and globally, the Ugandan Shilling continues to register improved performance in 2021
“ Uganda is Africa’s biggest coffee exporter Inflows, especially from coffee exports, buoy local currency”The Uganda Coffee Development Authority affirms
Uganda’s shilling has emerged as Africa’s third-best performing currency this year. An observation from the Bank of Uganda indicates that this multiplier effect is gained for a fourth straight day on Tuesday last week, buoyed by dollar inflows from coffee exporters and foreign investors chasing yield.
“We are seeing more dollar receipts, especially from coffee, and we have seen an increase in portfolio investments, which are being attracted to emerging markets and we continue to receive a lot of dollar inflows to non-governmental organizations,” said Benoni Okwenje, general manager for financial markets at Kampala-based Centenary Bank Ltd.
The East African nation’s currency gained 0.1% to 3,529.50 against the dollar by 1 p.m. in the capital, Kampala, increasing year-to-date gains to almost 4%, the most on the continent this year after Zambia’s kwacha and Mozambique’s metical, according to data compiled by Bloomberg.
The Uganda Coffee Development Authority affirms that Uganda is Africa’s biggest coffee exports and shipments climbed to a record in June on better yield from new trees, favorable weather, and improved prices. Exports in the first 10 months of the season that started Oct. 1 rose 20% year-on-year.
Despite the coronavirus pandemic effect on the economic output from the net importer that has ensued in less demand for the greenback, the shilling has benefited from the dollar’s general weakness against major global currencies, Okwenje said.
The local unit is projected to remain strong until the end of the year as portfolio investors are expected to stay active as economic growth accelerates.