Uganda Shilling Weakens to 3,920/USD Amid Rising Importer Demand
Traders warn of inflation pressures as importers scramble for foreign currency; Bank of Uganda pledges market intervention.
Kampala, Uganda
The Uganda shilling fell to UGX 3,920 per U.S. dollar on Wednesday morning, marking its weakest point in over six months, amid rising foreign-exchange demand from importers.
Finance analysts say the depreciation is driven by a combination of factors: increased imports of machinery and fuel, delayed remittances, and cautious foreign investment flows.
“The shilling is under pressure because demand for dollars has surged faster than supply,” said Dr. Fred Muhumuza, an economist in the City.
“This could push prices of imported goods higher.”
Importers of fuel, electronics and industrial equipment say they are forced to pay higher rates to secure currency for shipments.
Grace Nabukeera , a trader in Kampala’s industrial zone, explained:
“We are now paying UGX 3,900–3,920 per dollar. Our operating costs are rising, and consumers will feel it soon.”
The Bank of Uganda reassured markets that interventions are ongoing to stabilize the shilling.
“We are monitoring exchange rates daily and will act to ensure stability,” said BOU spokesperson .
Economists warn that a prolonged depreciation could affect inflation and import-dependent industries but may boost export competitiveness.
Why it Matters
A weaker shilling raises prices for fuel, machinery, and imported goods.
Exporters may benefit from improved competitiveness.
Market confidence depends on timely central bank interventions.
What to Watch
Weekly foreign-exchange market performance
Inflation reports in coming months
Government import policies and forex availability
Export growth trends as a possible buffer
