FINANCE MINISTER GIVES UPDATE ON THE STATE OF UGANDA’S ECONOMY Key messages 1️⃣Let us avoid panic buying of foreign currency, speculative transactions driven by rumours and other behaviour that can amplify short-term pressure on the shilling. Remain calm, avoid panic-driven decisions. 2️⃣Government and the Bank of Uganda will continue to provide timely, factual communication to support informed decisions and confidence in the economy. 3️⃣Despite the current economic pressures, the fundamentals of our economy remain strong. Uganda's economy continues to grow, supported by increased production, investment and exports. 4️⃣Government and the Bank of Uganda are responding through prudent fiscal management and appropriate monetary policy. 5️⃣Government will rationalise non-essential expenditure, including foreign and domestic travel, workshops, meetings and other administrative costs, while protecting critical public services and priority development investments. 6️⃣Households should prioritise essential expenditure, conserve fuel and energy, and make informed purchasing decisions. 7️⃣Businesses should eliminate waste, improve operational efficiency, source inputs locally where commercially viable, and expand production for export markets. Finance Minister @henrymusasizi1 has this afternoon delivered a statement to Parliament of Uganda on the State of Uganda’s Economy, explaining the recent depreciation of the Uganda shilling and the measures Government and the Bank of Uganda are taking to stabilise the shilling. The Minister said the Ugandan shilling has come under significant pressure, weakening from approximately Shs 3,604 per US dollar in March 2026 to around Shs 4,500 by late October 2026. Musasizi said the underlying pressure arises from an imbalance between the demand for and supply of foreign exchange, particularly US dollars. “When demand for dollars to finance imports and meet other external obligations exceeds the supply generated by exports, investment and other foreign-exchange inflows, the price of the dollar rises,” said the Minister. He said the higher international petroleum costs have increased Uganda's demand for foreign exchange, adding that geopolitical tensions in the Middle East have heightened uncertainty and pushed up petroleum-related costs, including shipping and insurance. The Finance Minister said the demand for foreign exchange has increased across other sectors of the economy, adding that international financial conditions and market expectations have also contributed to the pressure. He also noted that the declining global prices for key agricultural exports, particularly coffee and cocoa and reduced tourism receipts have temporarily constrained Uganda's foreign-exchange inflows. ✳️How Government and the Bank of Uganda are responding? Musasizi said the Bank of Uganda has tightened monetary conditions, including raising the Central Bank Rate from 9.75 percent to 12 percent and increasing commercial banks' cash reserve requirement to 13.5 percent from 11 percent. He said these measures are intended to moderate excessive demand, contain inflationary pressures and support confidence in the shilling. “The Bank of Uganda will continue to manage liquidity and, where necessary, intervene in the foreign-exchange market to address excessive volatility, consistent with its mandate,” he said. Musasizi said Uganda remains committed to a market-determined exchange rate which allows the economy to adjust to changes in external conditions. Commenting about the international reserves, the Minister said they provide an important buffer against external shocks and their prudent management is necessary to address disruptive market conditions while preserving the country's capacity to meet external obligations. On the fiscal side, Musasizi said Government is supporting monetary policy through expenditure restraint and careful prioritisation. 📸 @Parliament_Ug