Bank of Uganda Deputy Governor Professor Augustus Nuwagaba has described the Uganda shilling as a “complex beast,” noting that its strength is influenced by several intertwined economic factors rather than a single measure. In a detailed insight shared publicly, Prof. Nuwagaba said the value of a currency reflects the overall health of the economy, shifts in global conditions and domestic policy decisions.
He pointed to export performance as one of the strongest pillars supporting the shilling. Uganda’s earnings from coffee, gold, cocoa, milk, beef, fish, flowers, tourism and labour export all contribute to foreign exchange inflows. Prof. Nuwagaba highlighted that gold alone brought in USD 4.2 billion in the 2024/25 financial year, underscoring the impact of strong export sectors on currency stability.
Remittances from Ugandans abroad were identified as another major support, generating USD 1.4 billion in the same financial year. He said these inflows provide an important cushion and help maintain stability during external shocks.
On monetary policy, the Deputy Governor noted that maintaining the Central Bank Rate at 9.75 percent helped contain inflation and strengthen confidence in the financial system. He explained that sound macroeconomic fundamentals, including controlled inflation and steady export growth, have reinforced trust in the shilling.
Prof. Nuwagaba also pointed to foreign direct investment as a key driver, especially inflows into Uganda’s energy and infrastructure sectors. Investment linked to the oil industry, he added, continues to improve economic prospects and support long-term currency resilience.
He concluded that Uganda’s currency strength comes from a combination of domestic economic performance and global dynamics. While fundamentals remain firm, he emphasised the need to sustain growth and maintain policies that support long-term stability.
