By Spy Uganda
The Ugandan Shilling (UGX) has cemented its position as one of Africa’s most resilient currencies, gaining 1.3% against the US dollar in June 2025 and maintaining its strength into July. This performance reflects Uganda’s robust economic fundamentals, including surging export earnings, steady remittance inflows, and disciplined monetary policy. However, external headwinds remain a potential threat to this upward momentum.
As of July 15, 2025, the shilling was trading at approximately UGX 3,583 to the US dollar—marking a 0.51% appreciation from the previous month and a 2.96% gain over the past year, according to official market data.
The Ministry of Finance attributes the currency’s resilience to a 72.1% surge in export revenues, which hit USD 1.1 billion in April 2025. Key drivers include strong global demand for Uganda’s gold, coffee, and cocoa. At a budget transparency forum on July 15, Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi remarked, “The Uganda Shilling has continued to strengthen against the US dollar, a sign of growing macroeconomic stability.”
President Yoweri Museveni, during his June 12 Budget Speech, also credited strategic policy initiatives: “Our focus on commercial agriculture and value addition is yielding results, strengthening our shilling and positioning Uganda as a regional economic hub.”
Central to this progress is the Bank of Uganda’s consistent monetary policy. By maintaining the Central Bank Rate (CBR) at 9.75% in its February 2025 decision, the Bank kept inflation contained at 3.9% in June—well below the 5% target. Deputy Governor Dr. Michael Atingi-Ego commented, “The current CBR level is adequate to control inflation while fostering Uganda’s economic growth and socio-economic transformation.” This stability has encouraged foreign portfolio inflows, reinforcing the shilling’s strength.
Additional support has come from a steady stream of remittances and commodity-driven hard currency inflows. A May 2025 Reuters report quoted market traders noting that “The shilling was firmer, supported by inflows of hard currency from exporters of commodities like coffee and tea,” a trend that has persisted into the second half of the year. Diaspora remittances continue to offer a crucial buffer against external shocks.
Despite this progress, challenges persist. The African Development Bank in 2023 cautioned that “external risks are tilted toward the downside,” highlighting geopolitical instability, climate-related agricultural disruptions, and regional trade uncertainties. A brief shilling dip in March 2024, triggered by offshore investors seeking higher returns elsewhere, underscored its vulnerability. In response, Ggoobi said, “This is a temporary shock. Ours is a free market with a floating exchange rate.”
Looking ahead, Uganda’s economic prospects appear bright, buoyed by the anticipated launch of oil production later in 2025 and a projected GDP growth rate of 6.2% for FY2025/26. At the National Budget Conference on June 12, Finance Minister Matia Kasaija emphasized, “The budget for FY2025/26 is focused on people and wealth creation,” with key priorities including digital transformation and agro-industrialization.
With the shilling continuing to show resilience, Uganda is positioning itself as a rising economic force in the region. Sustaining this momentum, however, will depend on prudent fiscal management and the country’s ability to navigate an increasingly uncertain global environment.
