Uganda President rejects plan to use reserves to stabilize shilling

President Yoweri Museveni has rejected a proposal from Bank of Uganda Governor Michael Atingi-Ego to use the nation’s foreign exchange reserves to stabilize the weakening Ugandan shilling. During an Independence Day address at State House Entebbe, Museveni argued against spending dollar reserves to defend the currency, stating, “It is not correct to squander our dollars.”

As the shilling has lost more than 11 per cent of its value against the US dollar this year, the President urged citizens and businesses to reduce reliance on foreign goods and instead prioritize locally manufactured products. He specifically criticized the use of reserves to finance imports such as perfumes and hair, suggesting that depreciation might actually benefit exporters.

This decision follows earlier warnings from the central bank regarding the economic implications of the Protection of Sovereignty Bill. In April 2026, Governor Atingi-Ego cautioned that the legislation could impact foreign-exchange inflows, the balance of payments, and domestic price stability. Museveni attributed the current currency pressure to factors including international fuel price increases driven by conflicts in the Gulf, declining export earnings, and reduced tourism receipts.