Overview:

Bank of Uganda economists report that $4.7 billion in foreign reserves will serve as a critical buffer against global economic shocks and fiscal risks in 2026.

KAMPALA, Uganda — The Bank of Uganda has maintained gross foreign exchange reserves of $4.711 billion as of August 2025 to shield the national economy from a wave of global uncertainties and volatile market shifts.

The central bank detailed the figures in its latest state of the economy report, emphasizing that these reserves are essential for sustaining investor confidence and enhancing resilience against both domestic and external shocks. To further protect the economy, the bank is utilizing a flexible policy framework designed to ensure sufficient liquidity in the foreign exchange market.

The move aligns with recent directives from the International Monetary Fund. IMF Managing Director Kristalina Georgieva recently noted that the global economy is undergoing a profound transformation, with major policy shifts in trade, immigration and digital currency reconfiguring markets.

“Navigating this transition will hinge on the strength and integrity of core national economic institutions, which are critical for effective and credible policymaking,” Georgieva said.

Bank of Uganda economists said a moderately tight and forward-looking monetary policy is necessary to protect against inflation and stabilize the exchange rate. This stability is viewed as the foundation for the government’s tenfold growth strategy, which targets investment in agro-industrialization, tourism, minerals and science.

The IMF warned that the independence of central banks is vital during this period of high uncertainty. Georgieva pointed out that political interference tends to loosen monetary policies and weaken national currencies, often resulting in higher inflation.

Despite the healthy reserve level, the Bank of Uganda remains vigilant regarding risks such as falling commodity prices, declining aid inflows and rising geopolitical tensions. The central bank report concluded that while macroeconomic stability is critical, continued structural reforms and economic diversification will be required to maintain growth momentum.