Shilling pares losses as exporter flows offset demand

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The Uganda shilling closed the Monday trading session little changed after early pressure from energy and manufacturing sector demand briefly pushed the currency weaker, before exporter inflows and bank selling pulled it back.

The shilling opened and closed at 3,595/3,605 to the dollar, after touching weaker levels of 3,613/3,623 during the session.

Rahmah Masagazi, a market analyst and trader, said demand from energy firms and manufacturers drove the mid-morning slide.

By mid-afternoon, she said, selling interest emerged from commodity exporters and commercial banks, gradually correcting the move and returning the currency to its opening range.

According to a report from Absa, mid-month tax payments also helped cushion the shilling from deeper losses, providing steady local currency demand at a time when offshore investors remained largely on the sidelines ahead of the general election scheduled for January 15, 2026.

Money market conditions remained tight as Absa reported with overnight rates averaged 10.08%, while one-week rates hovered around 10.55%.