Kampala | 19 August 2025 — The Ugandan shilling has strengthened steadily for the past 14 months, marking one of its longest appreciation streaks in recent years. Bank of Uganda Governor, Michael Atingi-Ego, has shed light on the factors behind the currency’s rise, stressing that the central bank has not intervened directly in the market.
“The currency has indeed appreciated for about 14 months. But let me clarify — the Bank of Uganda did not intervene during that period. Our last sale-side intervention was in June 2022,” Governor Atingi-Ego said.
According to him, the appreciation has been driven by a mix of domestic and global dynamics. These include robust coffee and cocoa exports, higher international coffee prices, prudent monetary policy, reforms in the foreign exchange market, offshore investor inflows, and the weakening of the US dollar globally.
The governor emphasized that Uganda’s exchange rate is determined by market forces, noting that artificially propping up exporters could destabilize the wider economy.
“Supporting exporters artificially would risk inflation and higher interest rates. Our focus is preserving stability without distorting fundamentals,” he explained.
Economists suggest that while a stronger shilling eases import costs and helps tame inflation, it may put pressure on exporters by making their goods relatively more expensive on the international market.
The Bank of Uganda maintains that its priority remains macroeconomic stability, ensuring that the exchange rate reflects genuine supply and demand conditions.
