The shilling is the currency of Uganda. Officially divided into cents until 2013, the shilling now has no subdivision.
History
The first Ugandan shilling replaced the East African shilling in 1966 at par. Following high inflation, a new shilling was introduced in 1987 worth 100 old shillings. The shilling is usually a stable currency and predominates in most financial transactions in Uganda, which has a very efficient foreign exchange market with low spreads. The United States dollar is also widely accepted. The pound sterling and increasingly the euro are also used. The Bank of Uganda cut its policy rate to 22% on 1 February 2012 after reduction of inflation for 3 consecutive months.
Coins
First shilling
In 1966, coins were introduced in denominations of 5, 10, 20 and 50 cents and 1 and 2 shillings. The 5-, 10- and 20-cent coins were struck in bronze, with the higher denominations struck in cupro-nickel. The 2-shilling was only issued that year. In 1972, cupro-nickel 5-shilling coins were issued but were withdrawn from circulation are now very rare. In 1976, copper-plated steel replaced bronze in the 5- and 10-cent and cupro-nickel-plated steel replaced cupro-nickel in the 50-cent and 1-shilling. In 1986, nickel-plated-steel 50-cent and 1-shilling coins were issued, the last coins of the first shilling.
Second shilling
In 1987, copper-plated-steel 1- and 2-shilling and stainless-steel five- and ten- shilling coins were introduced, with the five- and ten-shilling curved-equilateral heptagonal in shape. In 1998, coins for 50, 100, 200 and 500 shillings were introduced. Denominations currently circulating are 50, 100, 200, 500, and 1,000 shillings.
Banknotes
First shilling
In 1966, the Bank of Uganda introduced notes in denominations of 5, 10, 20 and 100 shillings. In 1973, fifty-shilling notes were introduced, followed by 500 and 1,000 shillings in 1983 and 5,000 shillings in 1985.
Second shilling
In 1987, notes were introduced in the new currency in denominations of 5, 10, 20, 50, 100 and 200 shillings. In 1991, five-hundred- and one-thousand-shilling notes were added, followed by five thousand shillings in 1993, ten thousand shillings in 1995, twenty thousand shillings in 1999, fifty thousand shillings in 2003 and two thousand shillings in 2010. Banknotes currently in circulation are 1,000, 2,000, 5,000, 10,000, 20,000 and 50,000 shillings. In 2005, the Bank of Uganda was considering whether to replace the low-value notes such as the 1,000-shilling with coins. The lower denomination notes take a battering in daily use, often being very dirty and sometimes disintegrating. On 17 May 2010, the Bank of Uganda issued a new family of notes featuring a harmonised banknote design that depict Uganda's rich historical, natural, and cultural heritage. They also bear improved security features. Five images appear on all the six denominations: Ugandan mat patterns, Ugandan basketry, the map of Uganda, the Independence Monument, and a profile of a man wearing Karimojong headdress. Bank of Uganda Governor Emmanuel Tumusiime Mutebile said the new notes did not constitute a currency reform, nor were they dictated by politics. The redesign, he said, was driven by the need to comply with international practices and to beat counterfeiters. Uganda is the first African country to introduce the advanced security feature SPARK on a regular banknote series. SPARK is an optical security feature recognised by central banks worldwide and is used on a number of banknotes for protection against counterfeiting.
As of 22 August 2011, one US dollar was worth 2,800 Ugandan shillings. The exchange rate dropped to USD 1 = UGX 2,901 in September 2011, and it bounced back to USD 1 = UGX 2,303 on 13 February 2012. As of 11 June 2020, 1 US dollar was valued at 3723 Ugandan shillings
