Exchange Rate Ugandan Shilling

The Ugandan Shilling (UGX) has experienced a relatively stable exchange rate over the years. Since its introduction in 1966, the UGX exchange rate has seen gradual appreciation against major currencies like the US dollar, British pound, and euro. However, it has also faced periods of depreciation due to various economic and external factors.

Variations in the UGX Exchange Rate

The UGX exchange rate has been influenced by factors such as inflation, balance of payments, government policies, and global economic trends. It has experienced fluctuations, sometimes sharp, due to changes in these variables. For example, when inflation rises significantly, the UGX tends to weaken against major currencies.

Significance of UGX in the Global Economy

The Ugandan Shilling, while not a major global currency, plays an important role in the East African region. It is widely used for trade and transactions within Uganda and neighboring countries like Kenya, Rwanda, Tanzania, and South Sudan. Its stability and convertibility are crucial for promoting regional economic integration and facilitating cross-border trade.

Shocks Experienced by UGX and Correlation with Other Currencies

UGX has been vulnerable to external shocks such as changes in global commodity prices, political instability, and global financial crises. These shocks have resulted in significant fluctuations in the UGX exchange rate. In terms of correlation, the UGX has a positive correlation with other East African currencies, as they are closely tied to regional economic developments. However, its correlation with major global currencies like the US dollar or euro is relatively weak due to the limited integration of the Ugandan economy with the global financial system.