Updated by Faith Barbara N Ruhinda at 1209 EAT on Friday 18 July 2025

The Ugandan Shilling (UGX) has solidified its status as one of Africa’s most resilient currencies, appreciating by 1.3% against the US dollar in June 2025 and sustaining its strength into July.

This strong performance underscores Uganda’s sound economic fundamentals, driven by rising export earnings, consistent remittance inflows, and prudent monetary policy. However, analysts caution that external headwinds—such as global market volatility and geopolitical risks—could pose challenges to the shilling’s upward trajectory.

By July 15, 2025, the Ugandan Shilling had strengthened to approximately UGX 3,583 per US dollar—representing a 0.51% monthly gain and a 2.96% appreciation over the past 12 months, based on official market figures.

According to the Ministry of Finance, the Ugandan Shilling’s resilience is largely attributed to a 72.1% surge in export revenues, which reached USD 1.1 billion in April 2025.

This growth has been driven by strong global demand for Uganda’s key exports—gold, coffee, and cocoa.

Speaking at a budget transparency forum on July 15, Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, noted: “The Uganda Shilling has continued to strengthen against the US dollar, a sign of growing macroeconomic stability.”

President Yoweri Museveni, in his June 12 Budget Speech, also highlighted the role of strategic policy initiatives in bolstering the currency: “Our focus on commercial agriculture and value addition is yielding results, strengthening our shilling and positioning Uganda as a regional economic hub.”

A key pillar of the shilling’s strength has been the Bank of Uganda’s consistent and disciplined monetary policy. In its February 2025 decision, the central bank maintained the Central Bank Rate (CBR) at 9.75%, helping to contain inflation at 3.9% in June—well below the 5% target.

Deputy Governor Dr. Michael Atingi-Ego noted, “The current CBR level is adequate to control inflation while fostering Uganda’s economic growth and socio-economic transformation.” This policy stability has boosted investor confidence and attracted foreign portfolio inflows, further reinforcing the shilling’s performance.

Additional support for the Ugandan Shilling has come from steady remittance inflows and sustained hard currency earnings from commodity exports.

A May 2025 Reuters report quoted market traders observing that “The shilling was firmer, supported by inflows of hard currency from exporters of commodities like coffee and tea”—a trend that has continued into the second half of the year. Meanwhile, diaspora remittances remain a critical buffer against external shocks, contributing to overall foreign exchange stability.

Despite the recent gains, the Ugandan Shilling remains exposed to external risks.

The African Development Bank, in a 2023 report, warned that “external risks are tilted toward the downside,” citing geopolitical instability, climate-induced disruptions to agriculture, and regional trade uncertainties.

The shilling’s brief dip in March 2024—driven by offshore investors reallocating capital in search of higher returns—served as a reminder of its vulnerability. Responding to the volatility, Permanent Secretary Ramathan Ggoobi remarked, “This is a temporary shock. Ours is a free market with a floating exchange rate.”

Looking ahead, Uganda’s economic outlook remains positive, supported by the anticipated commencement of oil production later in 2025 and a projected GDP growth rate of 6.2% for FY2025/26.

Speaking at the National Budget Conference on June 12, Finance Minister Matia Kasaija emphasized the government’s development agenda: “The budget for FY2025/26 is focused on people and wealth creation.” Key priorities include advancing digital transformation and accelerating agro-industrialization—both seen as catalysts for inclusive growth and job creation.

Is the Ugandan Shilling continues to demonstrate resilience, Uganda is steadily establishing itself as a rising economic force in the region. Sustaining this momentum will require prudent fiscal management and a strategic approach to navigating an increasingly complex and uncertain global environment.

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