Overview:
Minister of State for Information, Communication Technology and National Guidance Godfrey Kabbyanga said the new bill also seeks to meet demands from the sector players to promote FinTechs and embrace regional and global market developments.
The Cabinet of Uganda has approved the Foreign Exchange (Amendment) Bill, 2022, that seeks to address emerging issues and significant developments in the currency market.
Announcing the Cabinet decisions on Thursday, 19 January 2023, Minister of State for Information, Communication Technology and National Guidance Godfrey Kabbyanga said the new bill also seeks to meet demands from the sector players to promote FinTechs and embrace regional and global market developments.
“Since the enactment of the Foreign Exchange Act, 2004, there has been significant developments in the currency market and demands from the currency sector to review the Act. This is because the advent of technological innovation development in the East African Community Regional Legal harmonization criteria and increasing client sophistication resulted in a shift in the currency market customers’ expectations,” he told journalists at the media centre in Kampala.
“Since the enactment of the Foreign Exchange Act, 2004, there has been significant developments in the currency market and demands from the currency sector to review the Act. This is because the advent of technological innovation development in the East African Community Regional Legal harmonization criteria and increasing client sophistication resulted in a shift in the currency market customers’ expectations,”
Godfrey Kabbyanga, Minister of State for Information, Communication Technology and National Guidance
He said the new bill will address new innovative operational frameworks which are less costly and convenient, know your customer requirements, compliance to anti-money laundering and combarting of terrorism financing and increasing the minimum capital requirement among others.
The enforcement of this bill will be done by the Bank of Uganda, the minister stressed.
The announcement comes as the country’s central bank battles to keep the Uganda Shilling competitive amid inflationary pressures, some of which are spill overs from other economies.
Over the last five months, the Shilling has appreciated, largely due to improved inflows from coffee exports, low demand for dollars by importers and remittance inflows from Ugandans in the diaspora.
The depreciation of the Shilling – and its likely effect on prices – has been the largest contributor to the increment in lending rates.