Kampala, Uganda – May 19, 2025: The Ugandan shilling remained largely stable against the US dollar on Monday, supported by a notable decline in demand for hard currency, according to currency traders.
At 09:27 GMT, commercial banks quoted the local unit at 3,652/3,662 against the dollar, slightly stronger compared to Friday’s close of 3,654/3,664. The stability in the exchange rate is attributed primarily to reduced dollar purchases from market participants due to ongoing tax payments.
“Dollar demand is currently subdued as most corporates are meeting their tax obligations, limiting the pressure on the shilling,” noted a trader at a leading commercial bank in Kampala.
The Uganda Revenue Authority’s (URA) tax collection cycle often influences liquidity in the currency market. When businesses prioritize tax payments, their need for foreign exchange temporarily decreases, easing pressure on the local unit.
Market analysts expect the shilling to trade in a tight range in the coming days unless a significant uptick in importer demand or external shocks occurs.
This calm follows a recent period of heightened currency volatility across African markets, influenced by both domestic fiscal adjustments and global monetary shifts.
