The government has urged Ugandans to avoid panic buying of foreign currency and speculative transactions driven by rumours as the Shilling weakens against the US dollar, increasing pressure on import costs, businesses and household budgets.
The Minister for Finance Henry Musasizi made the call while presenting a ministerial statement on the state of the economy to Parliament.
The Shilling has weakened from approximately Shs3,604 per US dollar in March 2026 to around Shs4,500 in late October, meaning the amount of local currency required to buy a dollar has increased by about 25%.
Musasizi said the government was concerned not only about the depreciation but also the pace of the decline and its potential effects on prices, businesses and household welfare.
“Our concern as Government is not only the depreciation of the Shilling but also its speed and its impact on prices, businesses and household welfare,” Musasizi said.
He attributed the exchange rate pressures to several factors, including higher international petroleum costs, which have increased demand for foreign exchange, global market conditions and expectations, and declining international prices for key agricultural exports, particularly coffee and cocoa.
To address the pressures, Musasizi said the government was tightening monetary conditions through measures that include raising the Central Bank Rate (CBR) from 9.75% to 12% and increasing the Cash Reserve Requirement (CRR) for commercial banks from 11% to 13.5%.
The CBR is the policy rate the Bank of Uganda uses to influence monetary conditions, while the CRR determines the proportion of eligible deposits commercial banks must hold as reserves.
On fuel supply, Musasizi said the Ministry of Energy and Mineral Development and the Uganda National Oil Company were pursuing measures to strengthen petroleum supply security, improve procurement efficiency and reduce avoidable costs.
He also said the government was rationalising non-essential expenditure, including limiting spending on workshops, meetings and other administrative activities, while protecting critical public services and development investments.
Musasizi added that the government was strengthening expenditure discipline and cash management to reduce unnecessary liquidity pressures and moderate domestic borrowing requirements.
“I ask Ugandans to avoid panic buying of foreign currency, speculative transactions driven by rumours and other behaviours that can amplify short-term pressures on the Ugandan Shilling,” he said.
The ministerial statement prompted mixed reactions among Members of Parliament, although the nature of their concerns was not immediately detailed.