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Financial markets

Uganda's Foreign Exchange Market Remains Stable Amidst Regional Uncertainty

Strategic Insights

— 1 min read

The Uganda shilling has maintained a stable stance over the past year, driven by a combination of financial market reforms, prudent monetary policy, remittances, coffee export earnings, and offshore inflows, according to the Bank of Uganda. The currency has seen a year-on-year appreciation of 3.2 percent, with the Nominal Effective Exchange Rate (NEER) also showing a 1.8 percent gain. However, the shilling did experience a marginal weakness against the dollar in the past week, largely due to demand from commercial banks and corporates in the energy and manufacturing sectors.

Key Takeaways:

  • The Uganda shilling appreciated by 3.2 percent year-on-year to an average of Shs3,586.57 per US dollar in July 2025, up from Shs3,705.85 at the end of July 2024.
  • The central bank noted that the Nominal Effective Exchange Rate (NEER) appreciated by 1.8 percent year-on-year in July 2025.
  • The shilling marginally weakened against the dollar during the past week, closing at 3557/3567 levels compared to the opening of 3553/3563, driven by demand for hard currency from commercial banks and corporates in the energy and manufacturing sectors.
  • Absa Bank Uganda's acting head of trading, Mr. Richard Nsubuga, projects the shilling to consolidate within the broader Shs3,530-Shs3,600 range per US dollar in the near term, with a bias toward further strengthening.
  • The Kenya shilling traded sideways within the narrow 129.00-129.40 band, supported by sufficient dollar inflows from the interbank market to meet corporate demand.

Statistics:

  • Uganda shilling: Shs3,586.57 per US dollar in July 2025 (year-on-year appreciation of 3.2 percent) (Source: Bank of Uganda)
  • Nominal Effective Exchange Rate (NEER): 1.8 percent year-on-year appreciation in July 2025 (Source: Bank of Uganda)
  • Uganda shilling against the dollar: 3557/3567 levels (closing) vs. 3553/3563 (opening) during the past week (Source: Absa Bank Uganda)
  • Kenya shilling: traded within the narrow 129.00-129.40 band, supported by sufficient dollar inflows (Source: Absa Bank Uganda)
  • US dollar index: held above 98.50 on Friday, ahead of the annual Jackson Hole symposium (Source: Absa Bank Uganda)

Sources:

  • Bank of Uganda (August 2025 monetary policy summary)
  • Absa Bank Uganda (weekly analysis)
  • Absa Bank Uganda (acting head of trading, Mr. Richard Nsubuga)

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