The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The Uganda Shilling has continued to strengthen against the US Dollar in recent months, even as the country went through parliamentary and presidential elections last week.
By mid-January, the Shilling was trading at about 3,443 Shillings for buying and 3,453.18 Shillings as the official selling rate by the Bank of Uganda. According to the Central Bank, the Shilling has gained about 6 per cent against the Dollar over the past 12 months, including a sharp 4 per cent rise in just one month.
As of January 20, 2026, the exchange rate stood at around 3,458 Shillings per Dollar. Before the presidential election, on January 13, one needed 3,604 Shillings to buy one Dollar, while selling a Dollar earned 3,594.7 Shillings. However, when markets reopened after the elections on Monday, the Dollar had weakened to about 3,490 Shillings.
The Bank of Uganda says the stronger Shilling is mainly due to increased export earnings, especially from coffee and gold. Tourism and money sent home by Ugandans abroad also helped, as these usually increase towards the end of the year.
In addition, there has been increased foreign investment, especially in the oil and gas sector, as the country moves closer to oil production this year, according to the Ministry of Energy and Mineral Development.
The Central Bank has played down its role in the recent Shilling strength, saying it has not intervened in the market lately. Its last known action to absorb excess money from the economy was in November 2025, when 509.6 billion Shillings was removed to calm earlier volatility.
There have been public concerns that heavy government and political party spending during the election period could fuel inflation or weaken the Shilling. However, both the Bank of Uganda and the Ministry of Finance, Planning and Economic Development have dismissed these fears.
Economists say the brief volatility during the election period was caused by investors holding on to their Dollars due to political uncertainty. With the elections over, confidence appears to be returning.
“At this pace, we could see the exchange rate reach 3,400 Shillings per Dollar by the end of the month,” says Alex Kakande, a financial and investment advisor. “This is good news for importers, but tough for exporters and Ugandans abroad sending money home.”
A stronger Shilling means exporters who earn in Dollars receive fewer Shillings when they convert their money locally. The same applies to Ugandans in the diaspora, whose remittances now fetch less value than last year. Beyond local factors, the US Dollar has been weakening globally.
This follows interest rate cuts by the Federal Reserve, aimed at making borrowing cheaper and encouraging investment. Although many expected the Dollar to remain strong, other major economies have shown resilience, especially after President Trump introduced new trade policies, including higher import tariffs. The Uganda Shilling has also strengthened against regional currencies.
For example, it appreciated from over 27.83 Shillings before election day to about 26.67 Shillings by Wednesday.
****
URN
