Uganda Buys Its Own Gold For FX Reserves.
GFN – KAMPALA: Uganda’s central bank has launched a three-year pilot to purchase domestically mined gold, paying in local currency to build reserves and reduce exposure to external financial shocks.
In the latest report from Bloomberg, the Bank of Uganda confirmed that purchases under the program began Friday, marking a shift toward directly monetizing domestic resource output to strengthen foreign exchange buffers.
“Purchases for the three-year program aimed at building and diversifying the country’s foreign exchange reserves began Friday.”
The bank will acquire gold from licensed miners and settle transactions in Ugandan shillings, with pricing anchored to prevailing international benchmarks. Officials said the structure is designed to deepen local market participation while insulating reserves from volatility tied to traditional instruments such as foreign currencies and sovereign debt.
“The bank will buy domestically mined gold from licensed miners and payment will be in local currency based on prevailing international prices.”
The initiative is also intended to improve reserve adequacy and reduce systemic risk exposure by increasing the share of hard assets held on the central bank balance sheet.
“The program is aimed at strengthening reserve adequacy and reducing risks associated with conventional reserve instruments.”
The move aligns with a broader trend among emerging market central banks to accumulate gold through domestic channels, effectively converting local liquidity into reserve assets without relying on external funding markets.
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