Middle East Conflict Triggers Currency Depreciation in EAC Countries

The ongoing conflict in the Middle East has had far-reaching effects on the economies of East African Community (EAC) member states. According to Uganda's Ministry of Finance, the war has led to a depreciation of local currencies against the US dollar.

Kenya's shilling, Tanzania's shilling, and Uganda's shilling saw declines of 0.1%, 0.3%, and 0.7% respectively in August 2026. The Burundian franc and Rwandan franc each weakened by 0.2% on average during the month.

The conflict has disrupted global oil trade, with around 25% of seaborne oil passing through the Strait of Hormuz in 2025. The increased demand for dollars to finance fuel imports has put pressure on local currencies.