KAJIADO, Kenya — The Kenyan shilling strengthened against the Ugandan shilling in the week ending October 22, 2026, reversing an earlier recovery by Uganda’s currency and raising potential cost pressures for businesses trading across the border.
Data from the Central Bank of Kenya (CBK) show that one Kenyan shilling exchanged for 32.26 Ugandan shillings on October 22, compared with 30.46 on October 15.
The movement means the Kenyan shilling bought about 5.9 per cent more Ugandan shillings over the period, making Kenyan goods and services potentially more expensive for Ugandan buyers when prices are maintained in Kenyan shillings.
The weekly average also increased, from 31.40 Ugandan shillings per Kenyan shilling in the week ending October 15 to 31.89 in the week ending October 22.
The figures come as Uganda’s currency faces renewed pressure against the US dollar, prompting the Bank of Uganda (BoU) to intervene in the foreign exchange market after an emergency increase in its benchmark interest rate failed to sustain the shilling’s recovery.
Uganda’s shilling remains under pressure
On October 22, the Bank of Uganda notified commercial banks that it was selling foreign currency in the market, although it did not disclose the amount involved.
The intervention followed the central bank’s decision the previous week to raise its benchmark interest rate by 225 basis points to 12 per cent in an effort to curb the shilling’s depreciation and contain inflationary pressures.
The currency initially recovered following the rate increase but subsequently resumed its decline, reflecting continued demand for dollars and pressure from import-related payments.
The developments have put Uganda’s exchange rate back in focus, with implications for businesses that depend on imported goods and cross-border trade.
For Kenyan exporters, a weaker Ugandan shilling can complicate pricing and payments, particularly where transactions are denominated in Kenyan shillings or other foreign currencies.
However, the effect on individual businesses will depend on their pricing arrangements, payment currencies and ability to adjust to exchange-rate changes.
Kenyan exporters face currency risks
Uganda remains a major destination for Kenyan goods.
The Kenya National Bureau of Statistics reported that Kenya’s exports to Uganda rose by 28.8 per cent to approximately KSh162.4 billion in 2025, making the country Kenya’s leading single export destination.
Kenyan exports to Uganda include petroleum products, cement, pharmaceuticals, iron and steel products, soaps and edible oils.
When the Ugandan shilling weakens against the Kenyan currency, Ugandan importers may need more local currency to purchase goods priced in Kenyan shillings.
This can increase their costs and potentially influence the quantities they order or the prices they charge customers.
Also Read: Uganda shilling approaches Shs4,000 per dollar as forex demand rises
For exporters, currency volatility can also complicate negotiations over contracts, payment deadlines and profit margins.
The exchange-rate movement does not automatically mean Kenyan exports will fall. The actual impact will depend on demand, competition, changes in selling prices and whether businesses absorb some of the additional costs.
Kenyan shilling remains stable against the dollar
While the Kenyan shilling strengthened against its Ugandan counterpart, it remained broadly stable against the US dollar during the same week.
The CBK’s indicative exchange-rate data put the Kenyan shilling at KSh129.91 per US dollar on October 22, compared with KSh129.81 on October 15.
Kenya’s foreign exchange reserves stood at US$14.693 billion, equivalent to 5.9 months of import cover, according to the figures supplied in the CBK bulletin.
The contrasting performance of the two currencies highlights the different pressures facing businesses operating in East Africa.
While the Kenyan shilling held relatively steady against the dollar, Uganda’s currency remained under pressure, with potential consequences for the cost of trade between the two neighbours.
For Kenyan businesses selling into Uganda, the key concern will be whether the exchange-rate movement persists and how it affects buyers’ purchasing power, transaction costs and demand for goods.
