Uganda government urges calm as Shilling faces pressure

Ugandans have been urged to avoid panic buying of foreign currency, speculative transactions driven by rumors and other behaviour that amplifies short-term pressure on the shilling.

While presenting a statement on the state of the economy on Tuesday, 27 October 2026, the Minister for Finance, Planning and Economic Development, Hon. Henry Musasizi said government is supporting monetary policy through expenditure restraint and careful prioritisation.

“Bank of Uganda has tightened monetary conditions including raising the Central Bank Rate from 9.75 per cent to 12 per cent and increasing commercial banks’ cash reserve requirement to 13.5 per cent from 11 per cent. These measures are intended to moderate excessive demand, contain inflationary pressures and support confidence in the shilling,” Musasizi said.

The minister attributed the pressure on the Ugandan shilling to an imbalance between the demand for and supply of foreign exchange, particularly the United States dollars.

“According to the Bank of Uganda, net foreign-exchange demand from the energy sector increased from US$360 million in the three months ending September 2025 to US$620 million in the corresponding period of 2026. This represents an increase of US$260 million adding significant pressure to the foreign exchange market,” Musasizi said.

He noted that this has also affected fuel prices through the international cost of petroleum and the rate at which dollars are purchased, which puts a strain on the importation of fuel.

“To cushion consumers against high fuel prices, government will continue to promote a free, fair and competitive petroleum market that ensures reliable and uninterrupted fuel supplies. This will help prevent supply shortages, maintain healthy competition and moderate avoidable price pressures on consumers and businesses,” Musasizi said.

The minister also listed declining global prices for key agricultural exports like coffee and cocoa alongside reduced tourism receipts impacted by Ebola-related travel restrictions and health-screening measures, which have temporarily constrained Uganda’s foreign exchange flows.

“In implementing expenditure restraint, government will prioritise essential services, critical obligations and investments that strengthen production, employment and foreign exchange earnings. These include priorities under the Ten-fold Growth Strategy, particularly agro-industrialisation, tourism, mineral development, science, technology and innovation, and their essential enablers,” Musasizi added.

Hon. Gyaviira Lubowa (NUP, Nyendo-Mukungwe Division) called on the Uganda Revenue Authority (URA) to improve its working relationship with business owners, so as to improve tax collection that can boost the economy.
“I would request the minister that in the interim, he encourages URA to link up with the business community so that instead of just implementing procedures such as auctioning their merchandise, they can agree on terms to help them meet their tax obligations,” Ssebina said.

Rukiga County MP, Hon. Patrick Kiconco urged government to concretise diplomatic efforts to improve international awareness of Uganda’s Ebola-free status so as to increase the number of tourists coming into the country and bringing in foreign exchange.
“Uganda has not registered any new Ebola case, but we are still blacklisted and are not receiving tourists. There are people who might be afraid to come to Uganda because going back abroad could become problematic,” Kiconco said.

Kabweri County MP, Hon. Patrick Wakida warned against touching national reserves to quell the volatile foreign exchange market.

“Kenya touched their reserve in April, but if it was in December, they would not have done so. If we touch our reserve now, it will end up in consumer products. Let us advise our constituents to manage what they have for now. We are in a recession but we will recover,” Wakida said.

To boost the country’s financial reserves, Upper Madi County MP, Hon. Martin Drito proposed a policy shift to keep more of the national reserves in gold than in the US dollar.

Hon. Christine Apolot (Indep., Kumi District Woman Representative) and Hon. Paul Mwiru (NUP, Jinja South Division East) urged government to consider establishing a minimum wage for Ugandans as an intervention to improve their purchasing power.