Business in the foreign exchange market has dipped further by more than half, with sector sources suggesting daily transactions now at average of $4M (Shs14.4B) down from approximately $10M (Shs36B) 18 months ago.
The forex bureaux are blaming a huge reduction in foreign direct inflows, slow down in regional trade, as well as dwindling demand for international import requirements as some of the reasons for reduction in business.
Slower business activities apart, the shut down of some bureaux including Crane forex bureau, is not helping the conditions in the market either, where money traders are reporting nearly 65% reduction in profit margin across traded unit currencies combined.
Uganda’s nearly 270 registered forex bureaux are now having to deal with the running effects of wobbling inflows, demand and supply from regional markets as lower import requirements.
A cross section of money exchange points within the city, report that the general dip in business transactions has set their margins down by 65% over the past year alone. Money transfer agencies on the other hand, are reporting that their own structured mode of doing business is equally under threat.
Bank of Uganda has since revoked the license of more than 5 bureaux including the the former Crane forex bureau, partly due to what sources claim was flagrant violation of reporting conventions, including to the financial intelligence authority.
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