Historical Sketch

The Kingdom of Buganda was established in the 13th century. Other kingdoms emerged in the in the region of the Great Lakes such as Ankole, Busoga, Bunyoro-Kitara and Tooro-Rwenzururu. In 1890, the British East Africa Company established a protectorate over Buganda, which was taken over by the British government in 1894 and extended over the other states shortly afterwards. The whole territory was united under the name Uganda with the traditional monarchies keeping their local jurisdiction. In 1962, Uganda attained independence, and when it reconstituted as a republic the following year, the traditional kingdoms were abolished. In 1993, five of the kingdoms (Buganda, Bunyoro, Busoga, Rwenzururu, Tooro) were restored.

Monetary History Overview

Uganda kept the common East African currency with neighbouring Kenya and Tanzania for four years after independence. In 1966, the 1st Ugandan Shilling was introduced as national currency. It repegged from the Pound Sterling to the US Dollar and remained at par with the Kenyan and Tanzanian currencies of until end 1979. The peg of the three currencies had switched to IMF Special Drawing Rights (SDR) unit in 1975. In 1981, the Shilling got devalued by about 90%, and the exchange rate was floated. The ongoing civil war triggered a collapse of the economy including hyperinflation. In the next five years, the Shilling lost another 95% of its value. In May 1987, a currency cut was carried out by removing two zeros. At the changeover to the 2nd Ugandan Shilling cash holdings were partially confiscated by imposing a 30% "exchange tax". The economic situation had not stabilized, however, therefore the new currency continued to depreciate, adding to the more 75% devaluation made at its introduction. In the early 2000s, the currency stabilized for a short time, after already more than 95% of its value had gone. At the end of the decade the Shilling began again a slower but steady depreciation.

Uganda joined the International Monetary Fund (IMF) on 27.09.1963.

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