What is the Currency of Uganda?
According to the world bank, the Ugandan economy grew at a slower rate in the first quarter of 2016/2017. The economy registered a 0.2% decline compared to the previous quarter. In general, the world bank expects a slower rate of growth in the economy than the projected 5.8%. The average inflation reported was 4.7 percent, but the currency remained generally stable for a large part of 2016 until November when it began depreciating.
Access to financial services has allowed Ugandans to balance expenses and income efficiently, control monetary shocks and invest in physical and human capital. Access to credit is a major constraint - interest ranging between 22 and 25% of the loan amount prevent potential borrowers and leads to a high rate of default. The Economic Forum Global Competitiveness Report ranked Uganda 120th of 138 countries regarding the affordability of financial services. The official currency used in the country is the Ugandan shilling.
History of the Ugandan Shilling
The Ugandan shilling is the official currency used in Uganda. Up until 2013, the shilling was divided into 100 cents. However, today there are no subdivisions. Before its introduction in 1966, the currency used in the country was the East African shilling which was replaced at par with the Ugandan shilling (UGS). A high inflation led to the introduction of a new shilling (UGX) that replaced the old currency at a rate of 1UGX = 100 UGS.
The UGX is considered to be stable. The euro, sterling pound, and the USD are also used in the country, particularly by foreigners. On 1 February 2012, the Bank of Uganda, which is responsible for production, circulation, and stability of the currency reduced its rate to 22% due to three months of reduction in the level of inflation.
The first coins of 5, 10, 20 and 50 cents as well as 1 and 2 shillings were introduced in 1966. In 1987, the coins were remodeled, and the five and ten shilling coins in the shape of a heptagon were introduced. In 1998 the 50,100,200, and 500 shilling coins were introduced. The denomination of coins below 50 shillings were withdrawn, and currently, the 50, 100, 200, 500, and 1,000 shilling coins are in circulation.
The Ugandan notes were first introduced in in 1966 in denominations of 5, 10, 20 and 100 shillings. The 50-shilling coin was introduced in 1973, in 1983 the 500 and 1,000 notes were introduced followed by the 5000-shilling note in 1985. In 1987 the notes were remodeled and introduced in the denominations of 5, 10, 20, 50, 100 and 200 shillings. A newer model of the 500 and 1,000 notes were introduced in 1991. The new version of the 5,000-shilling note was introduced in 1993 followed by 10,000 in 1993 and the 50,000-shilling note in 2003. The 2,000 note was introduced in 2010, in the same year the Bank of Uganda introduced new versions of the Ugandan Banknote bearing the country's historical, cultural, and natural resources. They had improved security features as Uganda became the first country in Africa to incorporate the SPARK technology in its banknotes