Uganda’s shilling is projected to maintain its recent upward trajectory, supported by strong foreign exchange inflows and steady investor demand, market analysts told Bloomberg. The currency has benefited from robust coffee export earnings and increased remittances, bolstering central bank reserves and stabilizing exchange rate pressures.
Traders referenced by Reuters noted that the Bank of Uganda’s tight monetary stance has further anchored the shilling’s performance, attracting portfolio inflows and keeping inflation expectations in check. They suggested the shilling may continue appreciating in the short term, barring major external shocks.
In contrast, Zambia’s kwacha is expected to face deeper depreciation amid continued concerns over the country’s external debt challenges and strained foreign reserves. Economists cited in Financial Times said persistent dollar shortages and uncertainty around restructuring deals with creditors have weighed heavily on the local currency, discouraging investor confidence.
Market watchers explained that unless Zambia secures fresh financing or accelerates progress on debt restructuring, the kwacha could remain under sustained pressure through the final quarter of 2025.
The diverging trajectories of the two currencies underscore the broader economic dynamics shaping African foreign exchange markets, where commodity earnings, fiscal stability, and external financing continue to drive performance.
