RWAKAKAMBA: Hold the reserves, stop the rush for dollars

What the report says

Morrison Rwakakamba, writing in The Independent Uganda, argues that Uganda should not use foreign-exchange reserves to force the shilling back to an earlier level against the dollar. His letter, addressed to Finance Minister Henry Musasizi and dated around Uganda’s 64th Independence anniversary, comes as the shilling has weakened to record lows near 4,090–4,100 per dollar, according to the article. He says President Yoweri Museveni was right to reject using reserves as a broad fix for importers.

The piece says the current pressure on the currency is affecting fuel prices, import bills and expectations in the market. Rwakakamba describes a “third path” between spending reserves and doing nothing, arguing for limited interventions designed to slow overshooting, discourage hoarding of dollars and reduce mechanical pressures on the exchange rate. He also points to administrative issues such as customs valuation, suggesting they can intensify demand for foreign currency.

Among his proposals are tighter, temporary management of dollar sales, a separate window for essential imports such as fuel, fertiliser and medicines, and stronger disclosure from the central bank and government on reserves and pricing. He also calls for clearer public information on the pump-price formula and for investment screening to consider projects’ foreign-exchange impact. The broader context is Uganda’s dependence on imports and foreign exchange earnings, alongside debate over how to protect the economy without weakening reserve buffers.