We got it under control: BoU governor reassures as Uganda Shilling weakens further

Bank of Uganda Governor Michael Atingi-Ego has sought to calm fears over the sharp fall of the Uganda Shilling, stating Friday that  the central bank has the capacity to stabilise the currency.

The currency, which excelled globally over the past year, is facing severe global oil shocks.

The shilling was trading at about Shs3,930 against the US dollar on Friday, extending losses that have accelerated since the end of August.

Atingi-Ego addressed the depreciation on Friday, September 18, 2026, during the ninth Uganda Bankers Conference at Kampala Marriott Hotel in Nsambya.

“Let me say something that is on the minds of most Ugandans right now. You recall that towards the end of last week, the currency began to depreciate quite significantly and a number of concerns have been raised. It would be unfair if I don't give a comment,” Atingi-Ego said.

The governor linked the pressure to developments in the global oil market, noting that Uganda operates a market-determined exchange rate.

Oil prices have climbed above $100 a barrel amid conflict in the Middle East and disruptions to Saudi Arabian oil infrastructure.

This week, the shilling weakened to about Shs3,925/3,935 against the dollar from Shs3,860/3,870 a week earlier.

This is being blamed on strong dollar demand from manufacturers and energy companies.

Bank of Uganda Executive Director for Research and Policy Adam Mugume told Reuters that uncertainty surrounding the Iran conflict had also prompted some market participants to make forward dollar purchases to lock in exchange rates.

One trader told Reuters that the shilling could test Shs4,000 against the dollar if the pressure continues.

Atingi-Ego, however, said the central bank had successfully navigated similar episodes before.

He cited July and August 2022, when interest rate increases by central banks in advanced economies triggered capital flight from emerging and frontier markets.

The shilling weakened from about Shs3,650 against the dollar in February that year to nearly Shs3,900 before stabilising.

Atingi-Ego also recalled the pressure that followed the World Bank's August 2023 decision to halt new financing to Uganda. The lender announced the decision after Uganda enacted the Anti-Homosexuality Act.

The governor said the shilling approached Shs4,000 during that period but later recovered.

He pointed to another episode in February 2024, when neighbouring Kenya raised billions of dollars from international investors as it moved to buy back part of a maturing Eurobond.

The shilling again reached about Shs4,000 to the dollar before recovering, he said.

“In September 2026, because of the global oil developments, the currency is trading at about 3,930 right now,” Atingi-Ego said.

“I am bringing all this to tell you; the Bank of Uganda has what it takes to stabilise this exchange rate. Be still, all will be fine.”

The latest depreciation marks a sharp reversal from the strength the shilling displayed last year.

The currency ended 2025 at about Shs3,620 against the dollar, compared with about Shs3,670 at the end of 2024.

Earlier in 2025, the shilling had risen 6.1 per cent over a 12-month period and ranked as the best performer among 23 African currencies tracked by Bloomberg.

Strong coffee export earnings, remittances and foreign investment inflows supported the currency.

The Finance ministry also reported in 2025 that the International Monetary Fund's International Financial Statistics Division had ranked the shilling Africa's most stable currency.

That strength helped contain the cost of imports and contributed to lower electricity tariffs.

The picture has changed in recent weeks.

The shilling traded at a median of about Shs3,740 against the dollar in August before sliding past Shs3,900 in September as higher oil prices increased demand for dollars from fuel importers and other businesses.

Uganda is a net importer of petroleum products, making movements in international oil prices an important source of foreign exchange demand.