President Yoweri Kaguta Museveni has rejected a proposal by the Bank of Uganda (BoU) to use the country’s foreign exchange reserves to slow the depreciation of the shilling against the US dollar, arguing that a weaker currency benefits exporters.

Speaking during Uganda’s 64th Independence Day celebrations at State House, Entebbe, on Friday, President Museveni said using the reserves to lower the dollar’s exchange rate would be an inappropriate intervention, insisting that Uganda should instead reduce unnecessary imports and promote locally produced goods.

The President’s remarks come amid mounting pressure on the shilling, which had weakened to about Shs4,011 against the dollar by Friday morning, compared with approximately Shs3,700 in late September.

The proposed intervention would have involved drawing on Uganda’s foreign exchange reserves, estimated at about $6 billion, to increase the supply of dollars on the domestic market and ease pressure on the local currency.

President Museveni argued that currency depreciation increases the amount of shillings exporters receive when they convert their foreign earnings, although it raises costs for importers who require dollars to pay for goods and services from abroad.

He also attributed the recent increase in fuel prices and pressure on the economy to international conflicts, shifts in global capital flows and the Ebola outbreak.

The President said some foreign investors had moved their funds from Ugandan government bonds to markets offering higher interest rates, particularly in the United States, contributing to pressure on the local currency.

Despite the economic challenges, President Museveni maintained that Uganda’s macroeconomic fundamentals remained stable, pointing to what he described as manageable inflation.

He also highlighted the country’s economic growth under the National Resistance Movement (NRM) government, saying Uganda’s Gross Domestic Product had expanded from $3.9 billion in 1986 to $69.3 billion as of June 2026.