Uganda central bank sells dollars to slow shilling's depreciation

Uganda's central bank on Tuesday sold dollars in the interbank market, it said in a notice on data provider Refinitiv, offering support to the local currency which has been experiencing sharp depreciation due to the coronavirus-related disruptions.

At 0852 GMT, commercial banks quoted the local currency at 3,900/3,910. The central bank was still in the market selling dollars. It was the latest intervention this month by the Bank of Uganda to sell dollars in the interbank market to help stem a sharp depreciation of the local currency.

Uganda has thus far confirmed 9 cases of the COVID-19 disease and has closed all its borders to try to stem the spread of the virus. Those who arrived from high-risk countries in the days before the closure of borders were placed under a mandatory 14-day quarantine.

On Tuesday, traders said the shilling has experienced rapid weakening over the last several days as offshore investors cut positions in local assets. The shilling has lost 6% percent of its value against the dollar so far this year.