Africa-Press – Uganda. The Bank of Uganda (BoU) has reported a steady increase in the amount of currency circulating in the economy, reflecting growing economic activity and cash demand across the country.
According to the Integrated Annual Report 2024/2025, currency in circulation grew by 9% (Shs 771 billion), from Shs 8.21 trillion in FY 2023/24 to Shs 8.98 trillion in FY 2024/25.
“The Bank of Uganda continued to fulfill its mandate of providing adequate currency to support economic activity. Currency in circulation increased by 9% (Shs 771 billion), from Shs 8.21 trillion in FY 2023/24 to Shs 8.98 trillion in FY 2024/25,” the report stated.
The value of banknotes increased by 10% (Shs 763 billion), while the value of coins rose by 4% (Shs 9 billion) over the same period.
This growth highlights the continued reliance on cash as a primary medium of exchange in Uganda, despite the rising use of digital financial services.
The increase in circulation was mainly attributed to higher withdrawals relative to deposits. “Both inflows and outflows declined by 5%, resulting in a net outflow of Shs 771 billion, a 12% decrease from the Shs 878 billion recorded in FY 2023/24,” the report added.
BoU attributed this contraction to increased inter-bank collaboration and the recycling of currency in the banking system, which reduced the need for frequent withdrawals from the central bank.
Looking ahead, the report forecasts sustained demand for cash in line with the projected 7% GDP growth in FY 2025/26, supported by rising household consumption and increased public investment.
“The demand for cash is anticipated to remain strong in line with projected GDP growth of 7% in FY 2025/26, driven by rising household consumption and public investment,” the report noted.
Although Uganda is witnessing steady growth in digital payment platforms including mobile wallets, online banking, and fintech solutions the central bank emphasised that cash remains dominant.
“Although digital payment platforms are growing steadily, cash is likely to stay the main retail payment method in the near future because of infrastructure limitations and higher electronic transaction costs,” the report stated.
BoU reaffirmed its commitment to enhancing currency processing efficiencies in collaboration with commercial banks to meet the expected increase in cash demand while supporting the gradual transition toward a more digital economy.
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