Uganda’s foreign exchange reserves increased by 56% to $6.7 billion in the financial year ended June 2026, up from $4.3 billion a year earlier, as the country’s central bank announced plans to expand gold purchases to strengthen and diversify its reserve holdings.
According to Reuters, the Bank of Uganda disclosed the figures in a report released on Monday, October 12, 2026, highlighting an improvement in the country’s external financial position despite recent pressure on the Ugandan shilling.
The increase in Uganda Foreign Exchange Reserves represents a gain of $2.4 billion over the 12-month period, giving the country a larger financial buffer against external economic pressures.
The central bank also confirmed that its recently introduced Uganda Gold Purchase Programme would continue during the 2026/2027 financial year, which ends in June 2027.
The announcement comes as the Ugandan shilling has weakened sharply in recent weeks, falling through a series of record lows against the U.S. dollar.
While the higher reserves could help cushion the currency against further pressure, the Bank of Uganda has maintained that it does not defend a specific exchange rate and intervenes only to smooth excessive market volatility.
Uganda Foreign Exchange Reserves Record 56% Annual Growth
The increase in Uganda’s reserve holdings marks a significant improvement in the country’s external financial position.
Central bank figures show that Uganda Foreign Exchange Reserves rose from $4.3 billion in June 2025 to $6.7 billion in June 2026.
That represents an increase of approximately $2.4 billion within one financial year.
In its report, the Bank of Uganda linked the improvement to stronger confidence in the country’s economic position.
“These gains reinforced confidence in Uganda’s macroeconomic position and external-sector resilience,” the central bank stated.
Foreign exchange reserves are assets held by central banks to support external payments, manage financial pressures and strengthen confidence in a country’s ability to meet international obligations.
For Uganda, the increase provides additional financial protection at a time when exchange rate movements have attracted attention.
However, the reserve position remains below one of the central bank’s important benchmarks.
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Uganda Foreign Exchange Reserves Provide 3.7 Months of Import Cover
Despite the substantial increase, Uganda has not yet reached its target level of import cover.
The Bank of Uganda said the $6.7 billion reserve position was sufficient to finance approximately 3.7 months of future imports.
Its target is four months.
This means Uganda Foreign Exchange Reserves remain 0.3 months below the central bank’s desired level of protection.
Import cover is an important measure of external financial resilience because it indicates how long a country could finance imports using its foreign exchange reserves.
A higher level generally provides more protection against disruptions in foreign currency earnings or external financing.
Uganda’s improved reserve position therefore represents progress, even though the country has not yet achieved its stated benchmark.
The central bank’s plan to continue purchasing gold forms part of its wider effort to diversify the assets supporting that reserve position.
Uganda Gold Purchase Programme to Continue Through June 2027
The Bank of Uganda confirmed that it intends to continue buying gold during the financial year ending June 2027.
The Uganda Gold Purchase Programme was introduced earlier in 2026 as part of the central bank’s efforts to diversify its reserve holdings.
Gold provides an additional category of reserve assets alongside foreign currencies and other internationally recognised holdings.
By continuing domestic purchases, the central bank aims to broaden the composition of its reserves.
The programme is therefore connected to Uganda’s longer-term approach to managing external financial risks.
The Reuters report did not disclose the quantity of gold already purchased, the value of the central bank’s gold holdings or the amount budgeted for additional acquisitions.
Nevertheless, the decision to continue the Uganda Gold Purchase Programme confirms that gold accumulation remains part of the country’s reserve management strategy.
The initiative also comes at a time when several African economies are examining ways to strengthen their financial buffers and reduce concentration in individual reserve assets.
For Uganda, the immediate objective is to expand diversification while maintaining sufficient resources to support external financial stability.
Ugandan Shilling Weakens Despite Higher Reserves
The improvement in reserves comes against a difficult period for Uganda’s currency.
According to Reuters, the Ugandan shilling has weakened sharply in recent weeks, falling through several successive record lows.
The currency’s performance has raised questions about whether the central bank could use its larger reserve holdings to limit further depreciation.
However, the Bank of Uganda has made its exchange rate policy clear.
It does not target a particular value for the shilling.
Instead, the central bank says its interventions are intended to smooth excessive volatility in the foreign exchange market.
That distinction matters because higher Uganda Foreign Exchange Reserves do not automatically mean the central bank will attempt to reverse currency depreciation.
The additional reserves could provide greater capacity to respond to disruptive market conditions, but the bank’s stated policy remains focused on volatility rather than defending a fixed exchange rate.
The Reuters report did not provide a new intervention announcement or indicate that the central bank had changed its policy.
Uganda Gold Purchase Programme Supports Reserve Diversification
The decision to continue purchasing gold reflects the importance of managing the composition of Uganda’s external assets.
Foreign exchange reserves can include different types of internationally recognised assets, each carrying its own financial characteristics and risks.
Gold is one such asset.
Through the Uganda Gold Purchase Programme, the central bank is seeking to add to its holdings of the precious metal as part of a broader diversification strategy.
This does not eliminate exchange rate risks or guarantee that the shilling will strengthen.
However, it provides another category of assets within the country’s reserve portfolio.
The programme also complements the recent increase in Uganda Foreign Exchange Reserves by focusing on how those reserves are structured and managed.
The central bank has not disclosed a specific gold accumulation target for the 2026/2027 financial year in the Reuters report.
Its announcement instead confirms the continuation of purchases as part of its reserve management plans.
What This Means For Africa
Uganda’s 56% increase in foreign exchange reserves highlights the importance of building stronger financial buffers as African economies navigate currency pressures and external financing requirements.
The rise from $4.3 billion to $6.7 billion gives Uganda a larger reserve position than it held a year earlier.
For the wider continent, the development demonstrates how reserve accumulation can improve a country’s ability to manage external financial challenges.
However, Uganda’s experience also shows that stronger reserves do not necessarily prevent currency depreciation.
Despite the increase in Uganda Foreign Exchange Reserves, the shilling has weakened to successive record lows in recent weeks.
That contrast highlights the difference between maintaining external financial buffers and determining the market value of a national currency.
The Bank of Uganda’s decision not to defend a particular exchange rate reflects its stated approach to managing market volatility.
Another important development is the continuation of the Uganda Gold Purchase Programme.
Gold purchases introduce an additional dimension to reserve management and demonstrate Uganda’s interest in diversifying the assets it holds.
For African countries with domestic gold production, such programmes may also create opportunities to connect local mineral resources with national reserve strategies, although the benefits depend on how purchases are financed and managed.
Uganda’s experience provides an example of how reserve accumulation and diversification can operate together.
The country’s reserve holdings have increased substantially, but its import cover remains at 3.7 months, below the four-month target.
That gap means further progress would be needed to reach the central bank’s stated benchmark.
The continuation of the Uganda Gold Purchase Programme through June 2027 also creates another area to monitor as the country develops its reserve portfolio.
For now, the improvement in Uganda Foreign Exchange Reserves represents a stronger external financial position, while the performance of the shilling and the country’s progress towards four months of import cover remain important indicators of economic resilience.
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