Uganda's foreign exchange reserves have risen by US$139.5 million, following improvements in the country's overall balance of payment. This brings it closer to the benchmark set by the East African Community for monetary stability.
In its Monetary Policy report of February 15, the Bank of Uganda said that the overall balance of payments resulted in a surplus of US$139.9 million in the quarter ended December 2016, leading to a net build-up in reserves of US$139.5 million.
"The stock of reserves at the end of December 2016 was US$3.02 billion (4.5 months of future imports of goods and services)," said the executive director of research at BoU, Adam Mugume.
EAC requires its members to have reserves that can keep the economy going for at least four months in line with international trade obligations.
Dr Mugume said that increased earnings from coffee exports have boosted the country's foreign exchange reserves.
In the last quarter of 2016, the goods account deficit improved from US$397 million to US$228 million due to increased receipts from exports and decreased expenditure on imported goods, BoU data shows. Similarly, the services account balance improved from a deficit of US$163 million to US$97.3 million largely due to a US$108.7 million decline in payments for other business services.
Source: NAM NEWS NETWORK