Panic selling by Ugandan banks and forex dealers has triggered sharp depreciation of the Kenya shilling versus the dollar, coupled with a scarcity of the Kenyan unit. Consequently, the Kenya shilling exchange rate versus Uganda shilling slumped from an average Ush30 to a record low of Ush24 last month. But the Kenya shilling slightly recovered to Ush26/27 against Uganda shilling.
A spot-check in Kampala’s downtown forex bureaus show an apparent scarcity of Kenya shillings among forex dealers despite an open capital account regime that allows seamless entry and exit of foreign currencies in Uganda’s financial system.
