The Bank of Uganda (BoU) has launched the Uganda Foreign Exchange (FX) Swap Curve, a new financial market benchmark designed to improve pricing transparency and strengthen the development of Uganda’s foreign exchange market.
The central bank said the benchmark, which has been published for the first time, provides a reference for the cost of foreign currency funding across different maturities. It is expected to support commercial banks, businesses, investors, policymakers and other financial market participants in pricing and valuing foreign exchange transactions.
“An FX swap is a financial arrangement in which two parties exchange one currency for another at an agreed exchange rate and simultaneously agree to reverse the transaction at a specified future date,” BoU explained.
The cost of an FX swap varies depending on prevailing market conditions, including interest rate differentials, exchange rate movements, liquidity and other factors affecting the foreign exchange market.
According to BoU, the new FX Swap Curve captures the implied cost of foreign currency funding across maturities ranging from overnight to one year. The maturities covered are overnight, one week, two weeks, one month, three months, six months, nine months and one year.
The central bank said the benchmark is expected to improve price discovery, transaction pricing, valuation and risk management while giving market participants greater insight into prevailing foreign currency funding conditions.
“The curve provides a reference for the cost of foreign currency funding across different maturities and will support market participants in pricing and valuing foreign exchange transactions,” the central bank said.
BoU developed the benchmark in collaboration with commercial banks and the London Stock Exchange Group (LSEG), following a pilot exercise aimed at establishing whether participating banks could consistently provide reliable market quotations across the different maturities.
The pilot helped lay the foundation for a system through which market quotations can be collected and used to calculate a daily benchmark reflecting conditions in Uganda’s foreign exchange market.
The FX Swap Curve will be published daily through the Daily Money Market Report. Commercial banks are required to submit timely and accurate quotations on each business day to facilitate the calculation and publication of the benchmark.
The first published curve, based on market data for August 6, 2026, at 5:00 p.m., showed swap points increasing progressively as the maturity period became longer.
The mid swap points stood at 0.205 for overnight transactions, rising to 2.768 for one week, 5.662 for two weeks, 14.138 for one month, 41.870 for three months, 85.548 for six months, 140.202 for nine months and 174.342 for one year.
The average bid swap points ranged from 0.096 for overnight transactions to 146.799 for one year, while average ask swap points ranged from 0.314 overnight to 201.886 for one year.
The figures represent reference benchmarks derived from quotations submitted by commercial banks. BoU cautioned that actual transaction prices may differ depending on prevailing market conditions, liquidity and other commercial considerations.
The introduction of the FX Swap Curve marks a significant development in Uganda’s financial market infrastructure, particularly at a time when businesses and financial institutions require reliable information to manage foreign currency exposure and funding costs.
By providing a transparent reference point across different maturities, the benchmark is expected to enable market participants to better assess the cost of foreign currency funding and make more informed financial decisions.
BoU said increased transparency in FX swap pricing would also contribute to greater efficiency in the foreign exchange market by improving price discovery and strengthening risk management practices among financial institutions and other market participants.
The central bank said the initiative would ultimately contribute to the continued development and resilience of Uganda’s financial system by providing a credible and consistent benchmark for foreign currency funding costs.
The launch places Uganda among financial markets seeking to strengthen market based pricing mechanisms and improve the availability of reliable benchmarks for financial transactions.
