President Museveni addresses investors at Sheraton Kampala Hotel
yesterday. Uganda’s economy is projected to grow to between 6 and 7 per
cent this financial year. PHOTO BY STEPHEN WANDERA.
The Central Bank has temporary stopped the
purchasing of monthly $50 to $100 million from the domestic money market
saying that the market conditions are unfavourable.
Bank of Uganda (BoU) has over the past two years
been purchasing United States dollars from the domestic market for
foreign exchange build up and policy operations in the foreign exchange
market.
“Bank of Uganda was purchasing dollars in the
range of $50 million to $100 million per month. However, we have stopped
purchasing dollars at the moment,” said the BoU executive director of
research, Dr Adam Mugume, on Wednesday.
The halt in dollar purchases from the market
coupled with demand by offshore investors in government securities
increased export earnings, reducing in the country’s import bill. This
has seen the Shilling appreciating against the dollar in the last two
weeks.
Reserves
Dr Mugume explained that the stock of reserves as at end of February 2013 amounted to $3,046 million which is equivalent to 4.4 months of future imports of goods and services
Explaining how Uganda’s export abroad faired in
the past months, Dr Mugume said exports increased by in February 2013.
However, coffee exports recorded a 0.2 per cent decline month on month,
on account of lower volumes and price.
The period under review has seen Uganda’s balance
of payment improving on account of increased export earnings. Dr Mugume
said trade balance improved mainly due to 4.9 per cent increase in
exports.
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