The
Ugandan government plans to invest in major infrastructure projects.
The plan is to invest $1.7 billion in Karuma hydropower plant, $556
million in Isimba hydropower dam and $8.5 billion in gauge railway
project.
The
projects are being overlooked by the Bank of Uganda (BOU), which has
kept away from intervening in foreign exchange market by selling
dollars. In fact BOU is buying dollars to facilitate the projects.
The
bank is seen selling and buying dollars at a fast rate, thus showing
that it is desperate to build reserves. By the end of 2013, BOU reserves
were estimated at $3 billion (Sh8.5 trillion)
The
shilling is said to have depreciated by 9% against the US dollar, which
could depreciate further by poor harvest thus meaning a loss to
farmers.
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