This archive report was first published on 15 May 2020.
According to the International Monetary Fund, Uganda's foreign exchange reserves are facing a significant decline in the 2020/21 financial year. This would leave the country with less than two months' worth of import cover, making it highly vulnerable to economic shocks.
The IMF warned that without external support, the country's foreign exchange reserves would plummet, resulting in a sharp decline of the Bank of Uganda's (BoU) reserve buffer. This would be below the adequate level of reserves for Uganda, putting the country in a precarious position.
As the IMF stated in a recent statement, 'Absent external support, the expected deterioration in the current, capital and financial accounts would result in a sharp decline of the Bank of Uganda's (BoU) reserve buffer.' The IMF emphasized the importance of external support in maintaining Uganda's economic stability.
