The Ugandan shilling is in dire economic straits after a report on its continued decline.
The Bank of Uganda in a statement today projected that the Ugandan shilling which has been on a free fall against the US dollar since last month is depreciating rapidly.
The major concern from this rising inflation is the impact on the economy, with a rise in the cost of goods and services to be expected.
In a bid to stem the tide of depreciation, the Bank increased its interest rate from 9.5% to 10% on Friday.
Incidentally, the decline of the Ugandan currency started in November 2023, but at the current rate will have devastating effects on the economy.
The deputy director of the Bank, Micheal Atingi-Ego, released this information in a statement during their Monetary Press Release.
Currently, the shilling opened at Shs3,909.96 against the US dollar, shortly before closing at Shs3,910. This is due to an outflow increase of some offshore investment and domestic market demand.
However, despite the bleak outlook of the currency’s foreseeable future, the Ugandan economy is still set to grow by about 6%. This is still due to continue till even around 2025, though this is relative to factors in the East African markets.
