BoU launches FX swap curve to boost transparency in forex market

KAMPALA — August 10, 2026 — The Bank of Uganda [BoU] has launched the Uganda Foreign Exchange [FX] Swap Curve, a new financial market benchmark aimed at improving pricing transparency and supporting the development of the country’s foreign exchange market.

The central bank said the curve, published for the first time, provides a reference for the cost of foreign currency funding across different maturities and will 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. Its cost varies depending on prevailing market conditions, including interest-rate differentials and movements in exchange rates.

According to BoU, the new benchmark captures the implied cost of foreign currency funding across maturities ranging from overnight to one year, covering overnight, one week, two weeks, one month, three months, six months, nine months and one year.

The central bank said the curve is expected to improve price discovery, transaction pricing, valuation and risk management, while providing market participants with greater insight into foreign currency funding conditions.

BoU developed the benchmark in collaboration with commercial banks and the London Stock Exchange Group [LSEG]. A pilot exercise was conducted to establish that participating banks could consistently provide reliable market quotations across the different maturities.

The FX Swap Curve will be published daily through the Daily Money Market Report, with commercial banks required to submit timely and accurate quotations on each business day to facilitate its calculation and publication.

Curve rises sharply across maturities

The first published curve, based on data for August 6, 2026 at 5:00 p.m., showed mid-swap points increasing progressively with the length of the maturity.

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 overnight to 146.799 for one year, while average ask swap points ranged from 0.314 overnight to 201.886 for one year.

BoU said the figures are reference benchmarks derived from quotations submitted by commercial banks and that actual transaction prices may differ depending on prevailing market conditions, liquidity and other commercial considerations.

The central bank said the introduction of the curve marks an important development in Uganda’s financial market infrastructure by providing a credible benchmark for foreign currency funding costs.

It added that greater pricing transparency would help market participants make more informed decisions, improve efficiency in the foreign exchange market and contribute to the continued development and resilience of Uganda’s financial system.

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