Uganda's Bank of Uganda Launches Gold Purchase Program to Diversify Foreign Reserves
TheWkly Analysis
Uganda’s foreign exchange reserves have been under pressure from global shocks and commodity price swings, leading to a heavy reliance on the U.S. dollar. The Bank of Uganda (BoU, Uganda's central bank that manages monetary policy) has launched a Domestic Gold Purchase Programme targeting 710 tonnes of locally-mined gold each year. This program is worth roughly $1.2 billion to $1.7 billion at the January 2026 price of $169,000 per kilogram, aiming to diversify reserve assets and reduce currency volatility. A World Gold Council survey (an organization that provides data on gold markets) found that 95 per cent of central banks worldwide have more than doubled their annual gold purchases since 2022, topping 1,000 tonnes per year. Additionally, 76 per cent of central banks plan to increase their gold holdings over the next five years, often at the expense of dollar-denominated assets, driven by geopolitical tensions, dedollarisation trends, and fears of sanctions.
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Key Entities
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Bank of Uganda Organization
Uganda's central bank that manages the country's monetary policy and has launched the gold purchase program to diversify reserves.
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World Gold Council Organization
An organization that conducts surveys on gold markets and reports that central banks are increasing gold holdings globally.
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Domestic Gold Purchase Programme Concept
A Bank of Uganda initiative to buy 710 tonnes of locally-mined gold annually to enhance foreign exchange security and reduce currency volatility.
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U.S. dollar Concept
The currency that Uganda and many countries rely on, with the program aiming to lessen dependence due to geopolitical risks.
Multi-Perspective Analysis
Left-Leaning View
Left perspectives might frame this as a necessary step against global inequality and dollar dominance, emphasizing how it empowers developing nations like Uganda.
Centrist View
Center perspectives would view it as a pragmatic economic strategy for diversification, highlighting global trends and the survey data without strong ideological bias.
Right-Leaning View
Right perspectives could see it as a cautious move away from risky dependencies, focusing on national security and the practical benefits of gold in volatile markets.
Source & Verification
Source: Observer RSS
Status: AI Processed
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