Following the unabated fall of value by the shilling against the dollar, the Bank of Uganda has come in to intervene and save the shilling.
In a statement signed by the BOU Director of Communications, Ms.Christine Alupo, the central bank intervened on the sale side of the interbank foreign exchange market.
Accordin to Ms Alupo, the Bank sold US dollars to the market in order to smoothen out excessive volatility in the movement of the exchange rate.
‘The intervention is intended to remove the spikes in the movement of the shilling against the dollar that have been observed lately in order to complement the intervention, the BOU has tightened shilling liquidity in the interbank market,’ the statement reads in part.
However, the bank distanced itself from controls that can determine the exchange rate.
‘The Uganda shilling exchange rate remains market determined and the bank does not target the level or direction of the exchange rate,’ the statement indicates.
Recently, the dollar hit the 3500 mark for the first time, disrupting business in the city as most traders yesterday locked their shops in protest; many claim that they pay rent in dollars which becomes inconveniening when the dollar fluctuates.