Uganda Shilling Hits New Low as Oil Prices Soar

The Uganda Shilling has continued to weaken against the US Dollar, reaching new highs on Tuesday according to the official Bank of Uganda (BoU) exchange rate. The dollar was quoted at 3,919 Shillings on the official market, while commercial banks were selling it for as much as 4,040 Shillings.

The sharp depreciation in recent months has sparked concern among businesses and the public, with questions being raised about the Central Bank's efforts to support the local currency. The Shilling has fallen from about 3,604 to the dollar since March, losing 315 Shillings in value.

However, the Bank of Uganda says the depreciation does not currently warrant direct intervention because the movement has been smooth and not volatile. Central Bank Governor Michael Atingi-Ego said the Central Bank intervenes in the foreign exchange market primarily to smooth excessive volatility, rather than to prevent every episode of depreciation.