Shilling on the Edge: Market Jitters Ease After Heavy Midweek Depreciation – Will the Gains Hold? The shilling endured one of its most volatile weeks in months, swinging from a sharp midweek slump to a cautious recovery as offshore outflows and import demand unsettled markets. Despite steep losses, the currency regained momentum, signalling resilience ahead of the festive season and heightened election-related spending.

The shilling experienced one of its most volatile stretches in recent months.

It swung wildly as offshore realignments and rising import demand disrupted its long-held stability.

The currency opened last Monday (10 November 2025) at UGX 3,500. By Thursday it had slipped sharply to UGX 3,660, a 4.57% depreciation in just three days.

The sudden weakness rattled the market, with traders unsure whether the downturn signaled a deeper correction or a brief disruption.

By Friday, however, the unit had managed to claw back some ground. It strengthened to UGX 3,595, a 1.78% gain from Thursday’s level, though still well below earlier trading ranges.

Alpha Capital Managing Partner Stephen Kaboyo said last Friday that the selloff reflected an oversold market.

This was driven by shifting offshore positions and heightened importer demand ahead of the festive season.

“The shilling was on shaky ground last Thursday, reversing sharply off the long-held stable position,” Kaboyo said.

“It threw the markets into a short panic, with players wondering whether the pullback was the start of a larger correction or a brief pause.”

He noted that “the currency was in oversold territory,” but was expected to recover gradually. It is expected to “settle around UGX 3,550 ahead of the festive season and as election-related spending expectations rise.”

However, the unit opened this week with early signs of stabilization. It traded at UGX 3,563.68 on Monday, a 0.87% appreciation from Friday’s close.

It then weakened slightly by midday to UGX 3,573.09. This was a 0.26% intraday loss, before firming to close at UGX 3,569.05, a 0.11% recovery.

Overall, from Friday’s close to Monday’s close, the shilling posted a 0.72% net gain. This suggests that market sentiment is beginning to steady.

Traders say underlying pressures remain, such as persistent importer demand and cautious offshore flows. They also note global risk concerns but point out that the unit’s ability to regain footing after last week’s steep drop signals resilience.

If election-related spending picks up and offshore outflows ease, analysts expect the local unit to drift toward Kaboyo’s projected UGX 3,550 level in the coming sessions.

For now, the shilling’s trajectory reflects a fragile but improving market. It is one attempting to regain balance after a week of rapid, sentiment-driven swings.