The Ugandan shilling traded on Thursday, 8 October, between 4,090 and 4,100 to the dollar at commercial banks, after touching several record lows during the month. The currency had lost more than 11% since the start of 2026, according to quotes collected by Reuters.
A week earlier, banks were quoting a range of 3,960 to 3,970 shillings to the dollar. The move between the two readings represents a depreciation of about 3.3% at the midpoint, without pre-judging movements since Thursday's close.
Currency dealers attribute the pressure to demand for foreign currency from importers of goods, energy companies and telecoms operators. Early dollar purchases ahead of the year-end commercial peak and high energy prices are reinforcing the trend.
A rate above 4,000 shillings to the dollar had already been recorded earlier in the month. The Ugandan newspaper Daily Monitor reported quotes of 4,017 to buy and 4,027 to sell on 5 October, compared with about 3,604 in March.
The decline mechanically raises the cost in local currency of dollar-denominated invoices when their international price does not change. Companies dependent on fuel, imported equipment or foreign inputs must then mobilise more shillings, with a risk of passing the extra cost on to consumer prices.
The Bank of Uganda said it does not defend a specific exchange rate level. Governor Michael Atingi-Ego explained in September that intervention aimed to smooth excessive volatility rather than prevent an orderly depreciation.
This stance leaves the market to absorb the imbalance between supply and demand for dollars, as long as movements do not become disorderly. The central bank says it has intervention tools but has not announced a threshold at which it would use them.
The available data describe the situation at the close on 8 October, not a real-time rate for 12 October. Upcoming movements will depend in particular on import payments, foreign currency inflows and central bank decisions.