Uganda Shilling Hits Record Low Amid Oil Price Surge

The Uganda Shilling has continued to weaken against the US Dollar, reaching an official exchange rate of Shs3,919 to the dollar on Tuesday. Commercial banks were selling the dollar for as much as Shs4,040.

This represents a depreciation of about Shs315 since March, when the shilling traded at approximately Shs3,604 to the dollar.

Despite concerns among businesses and the public over the outlook for the currency, Bank of Uganda Governor Michael Atingi-Ego says the current movement does not warrant direct intervention. He notes that the depreciation has been gradual rather than volatile, which is a key factor in deciding whether to intervene in the foreign exchange market.

Rising crude prices, linked to escalating tensions in the Middle East and disruptions to key shipping and oil-supply routes, have increased import costs for oil-dependent economies such as Uganda. Crude oil prices have risen to around $107 a barrel.