How rising dollar squeezes Ugandan wallets

What the report says

The Observer reports that a weaker Ugandan shilling is feeding into higher costs for imported goods, with effects felt from fuel pumps to supermarket shelves in Kampala and beyond. The article says the currency had been relatively stable for much of the year before weakening in September, and notes a rise in the exchange rate from about Shs 3,704.51 per dollar in August to around Shs 3,917 by September 14, then Shs 3,920–3,930 in later trading.

According to the piece, the main pressure comes through Uganda’s import-dependent economy. Importers need dollars to pay suppliers, wholesalers pass on higher costs, and retailers may eventually raise prices. Fuel is highlighted as a major channel because petroleum products are bought internationally in dollars; higher fuel costs can then affect transport, manufacturing and the price of everyday items.

The article also places the exchange-rate move in a broader trade context. It cites July 2026 merchandise imports of US$1.612 billion, up 25.4 per cent from July 2025, alongside exports of US$1.402 billion, up 10.1 per cent. The Observer says this shows Uganda is earning more foreign currency but still needs more of it to pay for imports. It argues that longer-term relief depends on boosting export earnings and value addition in areas such as coffee, agriculture, minerals and manufacturing.

For policy context, the report notes that the Bank of Uganda increased the commercial banks’ cash reserve requirement from 11 per cent to 13.5 per cent, effective September 24, as part of tighter liquidity management.