Ugandan Shilling Recovers as Offshore Investors Return to Market

The Ugandan Shilling has experienced a slight recovery in its value following the return of offshore investors to the local market, according to Bank of Uganda Governor Dr. Michael Atingi-Ego.

Appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on Tuesday, 10 November 2026, the Governor addressed concerns raised by Committee Chairperson Hon. Muwada Nkunyingi regarding the soaring dollar rate and the general state of the economy.

Atingi-Ego explained that earlier depreciation pressures pushed the exchange rate to nearly Shs4,500 per dollar. This downward spiral was triggered when the U.S. Federal Reserve raised its policy rate, making U.S. dollar assets more attractive and prompting non-resident holders of Ugandan government securities to sell off local assets in exchange for dollars.

To counter this pressure, the Central Bank increased the cash reserve ratio from 11 percent to 13.5 percent, mopping up close to Shs1.3 trillion. Additionally, the Central Bank rate was raised to 12 percent to make liquidity facilities more expensive for commercial banks.

These strategic interventions successfully increased the value of government securities. A recent auction offering Shs1.4 trillion attracted offshore players who purchased in excess of Shs200 billion, driving dollar inflows and stabilizing the exchange rate at around Shs4,050 per dollar.

Despite the positive outcome, the Governor cautioned that these monetary measures are short-term solutions. He urged lawmakers to advocate for the government’s tenfold growth strategy, focusing on agro-industrialization, mineral development, tourism, and value addition to sustainably strengthen Uganda’s economy. Lawmakers like Hon. Julius Nakiyi supported this stance, emphasizing the economic potential of adding value to agricultural exports such as coffee.

Read the full report on the Parliament of Uganda.