Judul : Money in circulation grows by Shs100 billion
link : Money in circulation grows by Shs100 billion
Money in circulation grows by Shs100 billion
What you need to know:
- It serves as a key indicator of the money supply actively used for transactions or stored as a form of wealth. In Uganda, the right to issue banknotes and coins lies exclusively with the central bank
The value of currency in circulation rose from Shs8.614 trillion in April to Shs8.718 trillion in May 2025, largely due to the expanding size of the Ugandan economy, according to data from the Bank of Uganda (BoU). Currency in circulation refers to the total amount of banknotes and coins physically held by the public and financial institutions, excluding those held by the central bank. It serves as a key indicator of the money supply actively used for transactions or stored as a form of wealth. In Uganda, the right to issue banknotes and coins lies exclusively with the central bank. These are released to support transactional needs and economic activity.
Uganda’s nominal GDP grew to Shs226.34 trillion ($61.3 billion) in FY 2024/25, up from Shs203.71 trillion ($53.9 billion) in FY 2023/24. Responding to a Daily Monitor inquiry on July 15, Dr Adam Mugume, the executive director of research at BoU, explained that currency growth is influenced by both demand and supply factors. “Currency demand grows in tandem with transaction volumes in economies like Uganda, where cash remains the dominant payment method,” he said. “On the supply side, growth occurs when the government disburses cash drawn from BoU. But the Shs103 billion increase between April and May is relatively modest,” he added.
Uganda Shilling stable
Despite global financial volatility, the Uganda Shilling has remained relatively strong and is currently ranked as one of the most stable currencies in Africa, according to Bloomberg. “This resilience stems from sound financial market reforms, prudent monetary policy, and steady foreign exchange inflows—mainly from coffee exports, tourism, personal remittances, and offshore investors,” Dr Mugume noted. “Additionally, the depreciation of the US dollar against major international currencies, as seen in the US Fed Index, has contributed to the shilling’s strength,” he added. Between March 2024 and May 2025, the Uganda Shilling appreciated by 6.2 percent, with an average mid-rate of Shs3,653.4 per US dollar.
On an annual, quarterly, and monthly basis, the shilling appreciated by 3.6 percent, 0.7 percent, and 0.4 percent, respectively. On a trade-weighted basis, the Nominal Effective Exchange Rate (NEER) remained stable in May 2025 compared to April and appreciated by 3.0 percent year-on-year. This suggests the shilling also gained value against a basket of Uganda’s key trading partners’ currencies. “A stronger NEER helps reduce the cost of imported raw materials, which in turn supports low and stable inflation,” Dr Mugume added. According to the Uganda Bureau of Statistics, annual headline inflation rose to 3.9 percent in June 2025, up from 3.6 percent in May.
However, core inflation remained steady at 4.2 percent over the same period, remaining within BoU’s medium-term target range. As of midday on July 16, the official exchange rate stood at Shs3,578.14 per US dollar (buying) and Shs3,588.14 (selling), according to BoU. In its April 2025 regional economic outlook, the International Monetary Fund (IMF) advised Sub-Saharan African countries to avoid administrative controls in foreign exchange markets, such as restrictions that create parallel exchange rate systems. “Instead, governments should focus on consistent and tighter monetary and fiscal policies to manage exchange rate pressures,” the IMF said. The IMF also noted that improved regional payment systems—such as the Pan-African Payment and Settlement System (PAPSS)—can help reduce dependency on foreign currencies, ease cross-border trade, and enhance the implementation of the African Continental Free Trade Agreement (AfCFTA).
Stay updated by following our WhatsApp and Telegram channels;
Daily Monitor Telegram channel
Daily Monitor WhatsApp Channel
Demikianlah Artikel Money in circulation grows by Shs100 billion
Anda sekarang membaca artikel Money in circulation grows by Shs100 billion dengan alamat link https://www.punyakamu.com/2025/07/money-in-circulation-grows-by-shs100.html
0 Response to "Money in circulation grows by Shs100 billion"
Post a Comment