Uganda shilling passes 4,000 per US dollar to a record low; central bank not selling dollars

The Ugandan shilling fell past 4,000 to the US dollar on 5 October, its weakest level on record, the Daily Monitor reported. Commercial banks were quoting 4,017 to buy and 4,027 to sell. One US dollar was worth about 6.74 Chinese yuan at the 30 September central parity rate of 6.7351.

The currency has lost more than 300 shillings since March, when it traded at about 3,604, the Monitor said.

Forex dealers blamed heavy dollar buying by manufacturers, energy importers and traders, year-end import positioning and high global crude oil prices, the Monitor reported. Stephen Kaboyo, a forex expert at Alpha Capital Partners, was quoted by the paper as saying the shilling "came under immense pressure briefly testing 4000 level, registering a record low", and that the Bank of Uganda "still remained on sidelines avoiding direct intervention".

The Nile Post reported on 5 October that ABC Capital Bank quoted the dollar at 3,985 buying and 4,015 selling. It cited the Bank of Uganda as saying the pressure reflects "increased demand for dollars from sectors including oil, manufacturing and telecommunications", while inflows from mining and energy, agricultural exports and remittances have provided some support.

Reuters reported on 17 September, as carried by CNBC Africa, that the Bank of Uganda had ruled out selling dollars directly. Adam Mugume, its executive director for research and policy, called such action "policy inconsistency" and said policymakers had enough tools to manage exchange-rate volatility. The shilling was at about 3,925 per dollar that day, its weakest in more than two years, the report said.

Governor Michael Atingi-Ego addressed the 2026 Bankers Conference, organised by the Uganda Bankers' Association, on 18 September, when the shilling was trading at about 3,930, the Uganda Broadcasting Corporation (UBC) reported. The UBC quoted him as saying: "Bank of Uganda has what it takes to stabilise this exchange rate. So, be still. All will be fine." It said he pointed to developments in global oil prices and said Uganda has a market-determined exchange rate. The Monitor said the bank's intervention strategy is to smooth excessive volatility rather than defend specific exchange-rate levels.

The bank has also raised the cash reserve requirement, the share of customer deposits commercial banks must hold with the central bank, to 13.5 per cent from 11.0 per cent, effective with the reporting cycle of 24 September, PML Daily reported. David L. Kalyango, the bank's executive director of supervision and regulation, was quoted by PML Daily as saying the requirement "has been increased from 11.0 per cent to 13.5 per cent". PML Daily said the change was announced on 15 September.

The bank said the adjustment was meant to "support prudent liquidity management and enhance the effectiveness of monetary policy transmission", according to PML Daily. In May 2026 it had raised the requirement from 9.5 per cent to 11 per cent, PML Daily said.

The Nile Post said a weaker shilling raises the local cost of goods, services and payments priced in dollars, while exporters and people paid in dollars benefit because their foreign-currency earnings convert into more shillings.