Government Appeals for Calm as Ugandan Shilling Faces Foreign Exchange Pressures

The Ugandan government has called on citizens to remain calm and avoid panic buying or speculative transactions that heighten short-term pressure on the local currency. Presenting an economic statement before Parliament on Tuesday, October 27, 2026, the Minister of State for Finance, Planning and Economic Development, Hon. Henry Musasizi, detailed the fiscal and monetary measures being deployed to stabilize the economy.

According to the minister, the recent volatility stems from an imbalance in foreign exchange supply and demand, notably a steep rise in net foreign-exchange demands from the energy sector. Requirements surged from US$360 million in late 2025 to US$620 million in the corresponding period of 2026. This surge, compounded by declining global prices for agricultural exports like coffee and cocoa, alongside tourism dips linked to health-screening measures, has constrained foreign exchange inflows.

To curb these pressures, the Bank of Uganda has tightened monetary policy, raising the Central Bank Rate from 9.75 percent to 12 percent and lifting commercial banks’ cash reserve requirements to 13.5 percent. Meanwhile, the government is practicing expenditure restraint, prioritizing strategic sectors under the Ten-fold Growth Strategy such as agro-industrialisation, mineral development, and tourism.

Lawmakers weighed in with diverse recommendations during the parliamentary session. MPs suggested bolstering diplomatic efforts to broadcast Uganda’s Ebola-free status to revive tourism receipts, improving relations between the Uganda Revenue Authority and the business community, and exploring alternative reserve strategies, such as holding more national reserves in gold.

For more details, read the original report on the Parliament of Uganda.