Uganda's government has called on citizens to stop panic buying foreign currency and engaging in speculative transactions fuelled by rumours, as the shilling continues to weaken against the US dollar and puts pressure on import costs and household finances. Finance Minister Henry Musasizi made the warning while presenting a statement on the state of the economy to Parliament, saying the currency decline poses risks to prices, businesses and household welfare.
The shilling has depreciated sharply over the past seven months. According to the minister's statement, it weakened from approximately Shs3,604 per US dollar in March 2026 to around Shs4,500 in late October 2026, representing a decline of about 25%. Musasizi said the government was concerned not just about the depreciation itself but about the speed at which it is occurring and its consequences for the economy.
The minister attributed the currency pressures to multiple external factors, including higher international petroleum costs that have increased demand for foreign exchange, global market conditions and expectations, and falling international prices for Uganda's key agricultural exports such as coffee and cocoa. To counter these pressures, the government is deploying monetary tightening measures. The Bank of Uganda has raised the Central Bank Rate from 9.75% to 12%, while increasing the Cash Reserve Requirement for commercial banks from 11% to 13.5%, Musasizi said.
Beyond monetary policy, the government is addressing fuel supply through measures aimed at strengthening petroleum security and improving procurement efficiency, according to the statement. It is also rationalising non-essential spending by limiting expenditure on workshops, meetings and administrative activities while protecting critical public services and development investments. The minister said the government is strengthening expenditure discipline and cash management to reduce unnecessary liquidity pressures and moderate domestic borrowing requirements.
Musasizi directly appealed to Ugandans to refrain from behaviour that could worsen short-term pressures on the shilling. The ministerial statement prompted mixed reactions among MPs, though specific concerns were not immediately disclosed. For savers, borrowers and businesses in Uganda, the combination of currency depreciation and higher interest rates will increase the cost of servicing foreign-denominated debt and imported goods while reducing returns on local-currency savings.