Shilling weakens further as MPs ask why reserves are not used

What the report says

Uganda’s shilling continued to weaken this week, with the Bank of Uganda’s closing mid-rate at Shs4,085.71 to the dollar on Thursday. Uganda Business News reported that the currency has fallen by more than 10% since the start of the year, and traders interviewed by Reuters expected more pressure from strong dollar demand by importers, energy companies and telecoms firms. The article said the shilling had already moved past the Shs4,000 mark earlier in the week.

The report said the central bank has not stepped in to defend a specific exchange-rate level, although it has raised the cash reserve requirement for commercial banks to 13.5% from 24 September. It has not announced dollar sales, even though reserves were reported at $6.52 billion in August. A financial analyst cited in the story said businesses were buying and holding dollars ahead of the year-end trading period, while high energy prices were also adding pressure.

The exchange-rate fall prompted debate in Parliament. Independent MP Karim Masaba asked why reserves were not being used to support the currency, and lawmakers also pressed the government over the effect on fuel prices. Energy minister Monica Musenero said higher pump prices were driven by several factors, including the weaker shilling, a fuel excise increase in the 2026/27 budget and global supply pressures. Parliament adjourned the discussion until the government makes a broader statement on the economy and the currency’s impact.