The Egyptian pound and Ugandan shilling were Africa’s worst-performing currencies last month, overtaking Ghana’s cedi as dollar demand, capital outflows, and external economic pressures intensified across several of the continent’s foreign exchange markets.
Data compiled by African Market showed that the Ugandan shilling recorded the steepest depreciation among 17 African currencies tracked, weakening by 8.74 percent against the US dollar between October 1 and October 31. Egypt’s pound followed, down 6.90 percent, while Zambia’s kwacha lost 2.71 percent.
Ghana’s cedi, Africa’s strongest-performing currency in 2025, fell 0.42 percent during the month, placing it behind the Egyptian and Ugandan currencies in the latest comparison.
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The shift highlights the changing fortunes of African foreign exchange markets, where currencies that previously benefited from improved investor confidence now face renewed pressure from dollar demand, global financial conditions and domestic economic vulnerabilities.
Egypt’s pound recorded the continent’s second-largest currency decline, despite ongoing efforts to stabilise the foreign exchange market and sustain an economic recovery. The currency weakened from 52.16 per dollar on October 1 to 56.03 by October 31, extending its losses to a fresh record low.
The depreciation prompted the Central Bank of Egypt to raise its benchmark interest rates by 100 basis points, marking its first increase since March 2024. The Monetary Policy Committee increased the overnight deposit rate to 20 percent from 19 percent and the overnight lending rate to 21 percent from 20 percent.
The decision reflected growing concerns about currency stability and external economic uncertainty, even as inflation continued to ease. Annual urban inflation slowed to 13.9 percent in September from 14.5 percent in August, while core inflation declined to 14.1 percent from 14.9 percent.
The latest weakness follows years of exchange-rate adjustments aimed at addressing deep economic imbalances. Egypt floated the pound in November 2016 under a $12 billion International Monetary Fund programme, ending years of an overvalued exchange rate and persistent foreign currency shortages.
Further devaluations between 2022 and 2024, amid external shocks, rising import costs and renewed IMF reforms, pushed the currency to successive record lows before a more flexible exchange-rate regime helped restore some market stability.
The weaker pound has increased costs for households and businesses, particularly through higher prices of imported food, fuel and industrial inputs. However, exchange-rate reforms have also helped ease foreign currency shortages, improve reserve positions and attract investment.
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Egypt secured almost $50 billion in foreign direct investment in 2024, supported by the landmark Ras El Hekma investment agreement with the United Arab Emirates. Its economy has also shown signs of recovery, with growth reaching 5.3 percent year-on-year in the second quarter of the 2025/26 fiscal year.
Central Bank of Egypt Governor Hassan Abdalla has defended the country’s flexible exchange-rate framework, arguing that currency movements should reflect changing domestic and international economic conditions rather than be artificially suppressed.
Ugandan shilling faces mounting dollar demand
The Ugandan shilling fell evenmore sharply, highlighting the difficulty of stabilising the currency amid sustained dollar demand and foreign investors’ withdrawal.
It weakened from 3,913.55 per dollar on October 1 to 4,288.71 by October 31, despite the Bank of Uganda’s return to direct foreign exchange market intervention after more than four years.
The central bank reportedly sold up to $30 million on October 14, its first direct dollar sale since June 2022, as authorities attempted to slow the shilling’s depreciation. Currency dealers estimated the size of the intervention, although the bank did not officially confirm the amount.
The intervention followed mounting pressure that had pushed the shilling beyond the 4,000-per-dollar threshold earlier in October, taking it to its weakest level since 1993.
The Bank of Uganda also raised its benchmark interest rate by 225 basis points to 12 percent, its highest level since December 2016, in an effort to contain inflationary pressures and support the currency.
The combined measures initially strengthened the shilling to about 3,951 per dollar. However, the recovery proved short-lived. It weakened to 4,138 by October 16 and fell further to 4,191 by October 21, as corporate demand for foreign currency and offshore investors’ sales of Ugandan government bonds continued to weigh on the market.
The pressure reflects a combination of domestic and international factors. Higher global oil prices have increased Uganda’s demand for dollars to finance fuel imports, while rising US bond yields have made dollar-denominated assets more attractive to international investors.
Capital withdrawals have compounded the pressure. Citigroup estimates cited in local financial reporting indicated that more than $200 million left Uganda’s domestic bond market over two weeks as investors reduced their exposure to local assets.
Uganda’s investment requirements have also added to foreign exchange demand. Major oil-sector and infrastructure developments require imported machinery, equipment and construction materials, increasing the country’s need for foreign currency even as these projects hold the potential to generate future export earnings.
The central bank’s interventions have therefore exposed a wider challenge: monetary tightening and foreign exchange sales can provide temporary support, but cannot independently resolve persistent imbalances between foreign currency demand and supply.
Ghana cedi loses ground after strong 2025 performance
Ghana’s cedi presents a different picture. Its 0.42 percent depreciation in October was considerably smaller than the losses recorded by Egypt and Uganda, but marked a reversal from the rally that made it Africa’s best-performing currency in 2025.
The cedi’s strong performance last year reflected improved foreign exchange supply, stronger export earnings, tighter monetary conditions and renewed confidence in Ghana’s economic recovery.
However, its depreciation during 2026 illustrates how quickly currency gains can be challenged by changing market conditions and domestic economic pressures.
The shift is particularly significant given Ghana’s efforts to restore macroeconomic stability following its debt crisis, currency depreciation and restructuring programme. Sustaining the gains requires continued fiscal discipline, stronger foreign exchange inflows and confidence in the country’s economic policy direction.
Naira, kwacha and other African currencies also weaken
Beyond the three currencies, October’s figures show that depreciation remained widespread across African foreign exchange markets, although the scale of losses varied considerably.
Zambia’s kwacha weakened by 2.71 percent, followed by Tunisia’s dinar at 1.32 percent, Nigeria’s naira at 1.30 percent and Morocco’s dirham at 1.21 percent.
The CFA franc lost 0.89 percent, while the South African rand and Namibian dollar each declined by 0.29 percent.
Other currencies recorded more modest losses, including the Kenyan shilling, which depreciated by 0.19 percent, Malawi’s kwacha by 0.10 percent and Rwanda’s franc by 0.06 percent.
A smaller group of currencies strengthened against the dollar. Botswana’s pula appreciated by 0.35 percent, Tanzania’s shilling by 0.33 percent, Mauritius’ rupee by 0.20 percent and Zimbabwe’s ZiG by 0.79 percent.
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The differences underline the uneven pressures confronting African economies. While global dollar strength and tighter international financial conditions have affected several markets, domestic inflation, foreign exchange reserves, export earnings, import dependence and investor confidence continue to determine how individual currencies respond.
For Egypt and Uganda, the latest declines demonstrate the difficulty of defending exchange rates when underlying foreign currency demand remains elevated. Interest rate increases and direct market interventions may slow depreciation temporarily, but sustainable currency stability ultimately depends on stronger external earnings, credible economic policies and a more reliable supply of foreign exchange.
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Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.
