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The Ugandan shilling struggled against the dollar on Monday which can be attributed to increased demand for dollars from fuel and grain importers. Most financial intuitions across the country (commercial banks and forex bureaus) are buying US Dollars at 3,625 and selling at 3635. I was implying that the Ugandan Shilling rallied against USD by 6.37% this year. 

The UGX has held steady the past fortnight entering the weekend and this was supported by decreased demand for dollars from merchandise importers and traders in the interbank market. Trading at 3,665/ 3,677 at most financial institutions and forex bureaus around town like Dollar House, Metropolitan etc. My Fear is that this exchange regime could be temporary.

On the hand our Kenyan friends’ currency is getting a beating from the pegged currency (USD). This is mainly due to inflation and President Willam Ruto speech on Tuesday 27th June 2023, during his address at the Djibouti parliament. “We are not against the US dollar. We just want to trade more freely. Let us pay in US dollars what we are buying from the US. But what we are buying from Djibouti, let’s use local currency,” H.E William Ruto said.

The UGX made some small gains against the USD this week ahead of budget reading. The shilling is seen trading at the 3691/3701 levels. I believe the gains are mainly due to needs by firms or proprietorships to settle statutory obligations as the tax man will be on a massive look out for defaulters. Most taxes should be settled by 15th of the following month however income tax can be settled any time between closure of books and half year (30th June).

The local currency traded relatively stable last week with balanced demand and supply seen throughout. The shilling was seen trading at the 3735/3745 levels this week. Most traders are forecasting a volatile unit ahead of inflation numbers for May, as well as final touches being made in the sh52.7 trillion budget for 2023/24 by the Uganda government.

"Currently trading at 3735/3745 but we are highly likely to appreciate 3725/3735 by the next edition of the business insight”. That right there, was our prediction statement from the last business insight edition which has come to materialize. The prevailing market ranges for the UGX/ USD is 3722/3732. The currency should be able to hold steady here for the near future unless Bank of Uganda makes major interventions especially monetary.

In 2022, Uganda's economy faced several challenges, but it managed to withstand them. It is expected that the country's GDP growth will bounce back to 5.7% in FY23, thanks to the recovery of the services and industrial sectors after the COVID-19 pandemic. The Russia –Ukraine war has seen discussions held at a global level to ensure continuity of oil production and supply. The drop we are seeing today is an outcome of the efforts put in place. The other reason, is that 4.5 million liters of fuel is now being transported from Kenya via Lake Victoria daily, a move that has reduced the transportation costs to about 50%.

The Ugandan shilling (UGX) was stable on Monday, with mid-month tax payments depressing demand for hard currency from importing firms. Commercial banks quoted the shilling at 3,725/ 3,735 to the U.S. dollar, the same as Friday's close.

For several decades, it has been a long-running joke that doctors have bad handwriting. In fact, this has been the norm for so long that doctors with neat handwriting often find their medical capability jokingly brought into question by friends and patients alike. Doctors have not done much to disprove this stereotype, either. If you’ve ever received a handwritten prescription from your doctor, you’ve likely struggled to distinguish their handwriting from the scratch marks made by a chicken on the ground. So what then is it about doctors and illegible scribbles? Why do doctors have such terrible handwriting?

The Ugandan shilling traded stable against the dollar due to muted demand for dollars from importers and within the interbank market. The outlook reflects a weaker shilling to me, largely because the biggest Ugandan companies are foreign owned and with the closure of 2022 books it implies that proceeds/profits are paid through transfers in foreign currencies.