Uganda's Currency Goes Limp After Antigay Law Enacted

By Michelle Garcia

Originally published on Advocate.com February 26 2014 12:05 PM ET

The Ugandan central bank reports that its currency has already weakened by 1.8 percent after Western outrage that President Yoweri Museveni signed the long-contested bill that would punish LGBT people with jail time.

Uganda's currency relies heavily on foreign aid, but the shilling lost value this week, after the Norwegian, Dutch, and Danish governments said a cumulative $26 million in aid would no longer go to the East African nation because of the law, Time reports. A justice ministry official for the Netherlands also said the country would help LGBT Ugandans find asylum because of the new measures, according to UPI. Meanwhile, the United States and Canada have each stated that aid to Uganda will be reviewed as a reaction to the law as well.

U.S. senator Patrick Leahy, who is the chairman of the Senate Judiciary Committee, said the United States should consider blocking aid to Uganda, which amounts to $456.3 million annually.

"We need to closely review all U.S. assistance to Uganda including through the World Bank and other multilateral organizations,” Leahy said Tuesday.  

"Players in the interbank market are exerting a lot of demand pressure mostly because of concerns over news of aid cuts in relation to the antigay law," Faisal Bukenya of Barclays Bank told Reuters. "The Bank of Uganda has intervened on the selling side to try to soak up the demand," he added.