Ugandan Shilling gains against US dollar—report

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The Ugandan Shilling gained ground against the US Dollar by 0.3% on average last month, the latest performance of the economy report by the finance ministry indicates.

The February 2025 report that was released on Wednesday (February 19) said the US Dollar traded at an average mid-rate of sh3,677.7 during the month.

“The strengthening of the Shilling was partly attributed to the higher inflow of dollars from portfolio investors which outweighed the dollar's corporate demand,” it said.

The Kenyan Shilling also strengthened against the dollar by 0.1% in February, while the other currencies within the East African Community recorded losses.

The Burundi Franc, Rwanda Franc and Tanzanian Shilling depreciated by 0.2%, 0.9% and 4.4% against the dollar, respectively.

The report also said the Bank of Uganda (BOU) maintained the Central Bank Rate (CBR) to 9.75% in February because the prevailing monetary policy stance was deemed sufficient to control inflation while fostering economic growth.

The CBR is the rate at which BOU lends to commercial banks which in turn lend to the public on interest.

“The weighted average lending rates on Shilling-denominated credit declined for the third consecutive month, falling from 17.37% in December 2024, to 16.50% in January 2025,” it said.

“This reduction in lending rates was partly explained by the significant discounts on new loans for oil-related activities. Conversely, weighted average lending rates for foreign currency-denominated credit increased from 7.9% in December 2024 to 8.3% in January 2025,” it added.