Museveni rejects selling dollar reserves to prop up the shilling

What the report says

President Yoweri Museveni has publicly rejected proposals to use Uganda’s foreign exchange reserves to support the shilling, saying that selling dollars from the reserves would waste a national buffer. According to Uganda Business News, he said the central bank governor had wanted such a move, but he disagreed and urged Ugandans to reduce imports instead.

Museveni made the remarks during a virtual Independence Day celebration at State House, Entebbe, marking Uganda’s 64th Independence Day. The report says this was his first public response to the shilling’s recent weakness. The currency had fallen to Shs4,085.71 to the dollar on Thursday and had lost more than a tenth of its value this year.

The article places the comments against a broader debate over how Uganda should respond to currency pressure, fuel prices and a widening trade deficit. It notes that Bank of Uganda has not planned direct dollar sales and previously described such intervention as inconsistent with policy. The report also says reserves stood at $6.52 billion in August, equivalent to 3.6 months of imports excluding oil-project goods.

Museveni also linked the issue to import dependence, saying reserves should not be used for unnecessary purchases. As general context, central banks sometimes intervene in currency markets to smooth sharp volatility, but the report indicates Uganda’s authorities are choosing a more cautious approach while encouraging lower import demand.