Africa-Press – Uganda. For 14 consecutive months, the Ugandan shilling has been appreciating against major foreign currencies, a trend that has sparked debate among exporters, importers, and policymakers.
Presenting the Monetary Policy Statement for August 2025, Bank of Uganda Governor Michael Atingi-Ego attributed the steady rise to strong export performance, sound monetary policies, and global market trends.
“The currency has indeed appreciated for about 14 months. But let me clarify—the Bank of Uganda did not intervene during that period. Our last sale-side intervention was in June 2022,” Atingi-Ego said.
The Governor highlighted multiple factors behind the shilling’s strength, including robust coffee and cocoa exports, higher international coffee prices, foreign exchange market reforms, offshore investor inflows, and a weaker US dollar globally.
He emphasized that the Bank’s role has not been to prop up the currency artificially but to maintain a stable macroeconomic environment.
“The exchange rate is market-determined. Supporting exporters artificially would risk inflation and higher interest rates. Our focus is preserving stability without distorting fundamentals,” he explained.
The shilling’s appreciation has mixed implications for Uganda’s economy. On one hand, it lowers the cost of imports, easing inflationary pressures for households and businesses.
On the other, exporters—particularly in agriculture—may find their products less competitive internationally due to reduced shilling-denominated earnings.
Economists note that the central bank’s decision to allow market forces to guide the exchange rate reflects a cautious strategy, balancing stability with growth.
For now, the appreciation signals resilience in Uganda’s external sector, underpinned by strong commodity exports and prudent monetary management.
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