Botswana Guardian

‘ Africa’s best 3rd performing currency strong’

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Uganda’s shilling, Africa’s third- best performing currency this year, gained for a fourth straight day on Tuesday, buoyed by dollar inflows from coffee exporters and foreign investors chasing yield.

“We are seeing more dollar receipts, especially from coffee,” said Benoni Okwenje, general manager for financial markets at Kampala- based Centenary Bank Ltd. “We have seen an increase in portfolio investment­s, which are being attracted to emerging markets. We continue to receive a lot of dollar inflows to non- government­al organizati­ons.”

The East African nation’s currency gained 0.1percent to 3 529.50 against the dollar by 1 p. m. in the capital, Kampala, increasing year- to- date gains to almost 4percent, the most on the continent this year after Zambia’s kwacha and Mozambique’s metical, according to data compiled by Bloomberg.

Uganda is Africa’s biggest coffee exporter and shipments climbed to a record in June on better yield from new trees, favorable weather and improved prices, according to the Uganda Coffee Developmen­t Authority.

Exports in the first 10 months of the season that started Oct. 1 rose 20percent year- on- year.

The coronaviru­s pandemic has hurt economic output from the net importer, resulting in less demand for the greenback, Okwenje said.

In addition, the shilling has benefited from the dollar’s general weakness against major global currencies, he said.

The local unit is projected to remain strong to the end of the year as portfolio investors are expected to stay active as economic growth accelerate­s.

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