By David Mwanje
The Ugandan Shilling (UGX) has solidified its status as one of Africa’s strongest currencies, gaining 1.3% against the US dollar in June 2025 and holding firm into July. Driven by booming exports, steady remittances, and disciplined monetary policy, the shilling showcases Uganda’s economic resilience amid global volatility. Yet, external risks loom, threatening this upward trend.
As of July 15, 2025, the shilling traded at around 3,583 UGX to 1 USD, up 0.51% from the previous month and 2.96% over the past year, per market data. The Ministry of Finance points to a 72.1% surge in export earnings, reaching USD 1.1 billion in April 2025, fueled by gold, coffee, and cocoa. Speaking at a budget transparency event on July 15, 2025, Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury, said, “The Uganda Shilling has continued to strengthen against the US dollar, a sign of growing macroeconomic stability.”
President Yoweri Museveni, in his June 12, 2025, Budget Speech, highlighted the role of strategic investments: “Our focus on commercial agriculture and value addition is yielding results, strengthening our shilling and positioning Uganda as a regional economic hub.” This emphasis on agro-industrialization has significantly boosted export performance.
The Bank of Uganda’s steady policy has been key. By maintaining the Central Bank Rate at 9.75% in its February 2025 statement, the bank kept inflation at 3.9% in June, below its 5% target. On February 24, 2025, Deputy Governor Dr. Michael Atingi-Ego stated, “The current CBR level is adequate to control inflation while fostering Uganda’s economic growth and socio-economic transformation.” This stability has drawn offshore investments, further supporting the shilling.
Remittances and commodity exports have also bolstered the currency. Traders noted in a May 2025 Reuters report, “The shilling was firmer, supported by inflows of hard currency from exporters of commodities like coffee and tea,” a trend continuing into July. Diaspora remittances have provided a consistent foreign exchange cushion, easing currency pressures.
However, risks remain. The African Development Bank warned in 2023 that “external risks are tilted toward the downside,” citing geopolitical tensions, climate-related agricultural disruptions, and regional trade uncertainties. The shilling’s brief dip in March 2024, driven by offshore investors chasing higher yields, underscores its vulnerability. Ggoobi addressed this on March 15, 2024, stating, “This is a temporary shock. Ours is a free market with a floating exchange rate.”
With oil production set to start in late 2025, projecting 6.2% GDP growth for FY25, Uganda’s outlook is promising. Finance Minister Matia Kasaija, speaking at the National Budget Conference on June 12, 2025, said, “The budget for FY 2025/26 is focused on people and wealth creation,” emphasizing digital transformation and agro-industrialization.
The Ugandan Shilling stands as a beacon of economic strength. Sustaining this momentum will require vigilant policy management and adaptability to global challenges.
