Uganda Shilling Strengthens as Gold Revenues Bolster Foreign Exchange Reserves

For Immediate Release

KAMPALA, UGANDA — The Ugandan shilling has recorded its most stable period against the US dollar in over five years, supported by a significant increase in foreign exchange reserves driven by record gold export revenues and improved management of the country's external accounts.

Uganda's foreign exchange reserves rose to approximately USD 4.8 billion by the end of 2025, equivalent to around five months of import cover, the highest level recorded in the country's recent economic history. The increase has been driven primarily by the surge in gold export earnings, which reached a record USD 2 billion in 2025 as global gold prices rose sharply.

The shilling's improved performance has had tangible benefits across Uganda's economy. Import costs have stabilised, reducing inflationary pressure from foreign goods and inputs. Businesses with foreign currency obligations have benefited from greater predictability in their costs. And consumer purchasing power has been better protected than in previous periods of currency weakness.

The Bank of Uganda has used the improved reserve position to manage exchange rate volatility more effectively, intervening in the market when necessary to smooth short-term fluctuations without depleting the reserve buffer that underpins longer-term stability.

"The connection between Uganda's gold revenues and the shilling's stability is direct and significant. Every dollar of gold export earnings that flows through the formal banking system strengthens Uganda's reserve position and reduces the vulnerability of the currency to external pressures. The gold sector is doing important macroeconomic work as well as generating export revenue." Marcus Briggs, Non-Executive Director, Icon Gold

Uganda's improved currency position has also had positive implications for the country's debt management. A portion of Uganda's public debt is denominated in foreign currency, and a more stable shilling reduces the local currency cost of servicing those obligations, freeing up fiscal space for productive public expenditure.

The shilling's strength has encouraged a modest return of foreign portfolio investment to Uganda's domestic financial markets, with investors attracted by the combination of improved currency stability, declining inflation, and the Bank of Uganda's shift toward a more accommodative monetary policy stance.

"Currency stability creates a more attractive environment for all forms of investment, both domestic and foreign. When businesses and investors can plan with reasonable confidence about the exchange rate environment over the medium term, they make better and bolder investment decisions. Uganda's improved shilling position is contributing to a more dynamic investment climate across the economy." Marcus Briggs, Non-Executive Director, Icon Gold

The Bank of Uganda has indicated that maintaining exchange rate stability will remain a primary monetary policy objective in 2026, with the continued strength of gold export revenues expected to support the reserve position necessary to achieve this goal.

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