Uganda Shilling strengthens on back of more exports and investment inflows

The Ugandan Shilling continued to gain momentum in August 2025, averaging Shs 3,563.9 per US dollar, up from Shs 3,586.57/USD in July, according to the Performance of the Economy Report for August 2025 issued by Uganda’s Ministry of Finance.

The report cites higher export earnings, a globally weaker US dollar, and increased inflows from remittances and offshore investment in government securities as key drivers behind the Shilling’s appreciation. A stable macroeconomic environment has further encouraged foreign investors, boosting the supply of foreign currency in the market.

The Shilling also rose against other major currencies, gaining 1.6 percent against the Euro and 2.1 percent versus the British Pound. Earlier in 2025, the currency had weakened against these counterparts due to strong European growth, tight monetary policies, and Uganda’s rising import demand. In August, slower growth in the Eurozone, coupled with higher exports and a trade surplus with the European Union, helped reverse this trend.

The Ministry’s report highlights the broader implications for businesses and investors. A stronger Shilling reduces the cost of imported goods and external debt servicing while reinforcing confidence in Uganda’s economic management. However, economists caution that sustained appreciation could impact export competitiveness if not supported by strategic trade policies.