Terms

UGX Ugandan Shilling Overview History and Current Economy

UGX Ugandan Shilling Overview History and Current Economy

UGX (Ugandan Shilling): Overview, History, and Current Economy

What Is the UGX (Ugandan Shilling)?

UGX is the currency code for the Ugandan shilling, the national currency of the Republic of Uganda. It is used in the foreign exchange market and is administered by the Bank of Uganda (BoU). The BoU has the sole authority to print and mint banknotes and coins, and is responsible for the country’s monetary policy and fiscal stability.

Key Takeaways

  • UGX is the trading code for the Ugandan shilling, the official currency of Uganda.
  • UGX is a free-floating currency that was first issued in 1966 and then revalued at a rate of 100:1 in 1987.
  • Agriculture drives Uganda’s economy, with coffee being one of its primary exports.

Understanding the UGX (Ugandan Shilling)

The Bank of Uganda is the only entity with the right to mint, distribute, or destroy currency in Uganda. Coins are available in denominations of 50, 100, 200, 500, and 1,000 shillings, while banknotes are available in denominations of 1,000, 2,000, 5,000, 10,000, 20,000, and 50,000 shillings.

The Ugandan shilling was divisible into 100 cents, but after 2013, cents were abandoned and the shilling became the smallest unit of currency used.

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In 2010, the Bank of Uganda circulated shilling banknotes with enhanced security features and images depicting the nation’s history and culture. Although the Ugandan shilling is a stable currency, it is not uncommon for people in the country to use the U.S. dollar (USD), Great Britain pound (GBP), and the euro (EUR) in financial transactions.

UGX is the currency code used in the forex market, but the symbol USh is commonly used in local markets.

UGX (Ugandan Shilling) in Forex Trading

According to XE, the UGX is most commonly paired with the USD. As of December 2023, $1 is equal to around 3,781 UGX.

Assume the USD/UGX rate is 3,671. This means it costs 3,671 Ugandan shillings to buy one USD. If the rate increases to 3,900, that means the UGX has lost value relative to the USD. If the rate drops to 3,500, it would take fewer shillings to buy a USD, so the UGX would increase in value.

If the EUR/UGX rate is 4,008, that means it costs USh4,008 to buy one euro.

Revaluation of the Ugandan shilling occurred in 1987.

History of the UGX (Ugandan Shilling)

The Bank of Uganda was established in 1966, replacing the East African Currency Board. The first issue Ugandan shilling was introduced in 1966 and replaced the East African shilling at par. In 1987, a new shilling was issued with the currency symbol UGX, valued at 100 old shillings. The Ugandan shilling is a floating currency, not pegged to any other currency.

The Ugandan Economy

Agriculture is the most significant economic earner in Uganda, with coffee being one of the primary crops. The country also has oil and gas resources, but they contribute little to the economy. Uganda has a high level of poverty and under-education.

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According to World Bank data, Uganda is a heavily indebted country. It experienced 8% annual inflation in 2022. Uganda’s gross domestic product (GDP) was $45.57 billion in 2022, with a growth rate of 4.6%.

History of Uganda

Uganda is a landlocked nation in East Africa, known as the African Great Lakes region. It has a diverse population and fertile land rich in natural resources. Winston Churchill called Uganda "the pearl of Africa" when he visited while it was under British rule. Uganda gained independence in 1962 after being a British protectorate. It faced conflicts and government instability, including a military coup in 1971 led by Idi Amin. In 1979, legal rule was restored with assistance from Tanzania. Uganda has faced criticism for its poor record on human rights, torture, and child labor practices.

What’s the Difference Between UGX and USh?

UGX and USh both represent the Ugandan shilling, with UGX used in the forex market and USh used locally.

What Are Uganda’s Top 3 Exports?

Uganda’s top three exports are gold, coffee, and cocoa beans. Total exports for gold reached $1.99 billion in 2021. Coffee exports hit $547 million, while cocoa bean exports exceeded $92 million.

How Can I Invest in Uganda?

Investors can take advantage of opportunities in Uganda by purchasing mutual funds and exchange-traded funds (ETFs) that hold Ugandan companies and other interests. They may also be able to invest directly in Ugandan companies through depositary receipts.

The Bottom Line

The Ugandan shilling is the national currency of Uganda and is represented by the currency code UGX in the forex market. It replaced the East African shilling and is free-floating. Agriculture plays a significant role in the country’s economy, and Uganda is known for its exports of gold, coffee, and cocoa beans.

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