Bank of Uganda Doubles Net Surplus to UGX 1.32 Trln as Reserves Rise

The Bank of Uganda more than doubled its net surplus to 1.319 trillion Ugandan shillings in the 2025/26 financial year, supported by higher interest income and an expansion of its foreign exchange reserves, according to its annual report.

The central bank’s total assets increased 21 percent to 38.668 trillion shillings, while official foreign exchange reserves rose from US$4.3 billion to US$6.7 billion, strengthening the country’s capacity to meet external payment obligations and withstand global economic shocks.

Net operating income before foreign exchange gains and losses increased 24 percent to 1.909 trillion shillings. Total comprehensive income rose 123.6 percent to 1.517 trillion shillings, reflecting the improvement in the institution’s reported financial performance.

The bank attributed the increase in income to higher interest earnings from its foreign reserve portfolio and government securities and advances. It also reported a cost-to-income ratio of 47.5 percent, below its annual target of 75 percent.

Foreign assets increased 46 percent during the year, contributing to the expansion of the balance sheet. The central bank said the accumulated reserves covered approximately 3.7 months of future imports, excluding imports related to oil projects.

The reserve build-up was supported by export earnings, remittances and purchases from the domestic foreign exchange market. In April 2026, the bank also launched a three-year pilot Domestic Gold Purchase Programme to diversify its reserve holdings and reduce exposure to external shocks.

Inflation remained below the central bank’s medium-term target of five percent, with annual headline inflation averaging 3.3 percent and core inflation 3.4 percent during the financial year.

The Monetary Policy Committee maintained the Central Bank Rate at 9.75 percent while increasing the cash reserve requirement from 9.5 percent to 11 percent to absorb excess liquidity and contain potential inflationary pressures. The Ugandan shilling appreciated by an average of 1.8 percent against the US dollar during the period.

Uganda’s real gross domestic product grew by a preliminary 6.4 percent, according to the Uganda Bureau of Statistics, supported by activity in services, agriculture and industry. Private sector credit growth accelerated to 11.4 percent from 8.8 percent, indicating an improvement in lending activity.

The bank also advanced work on its financial infrastructure, bringing its core Electronic Document Management System into operation in May 2026 and upgrading its real-time gross settlement system. Preparations for a National Payment Switch continued, with the intended aim of improving interoperability and reducing transaction costs.

The institution, established in 1966, increased its workforce to 1,025 employees during the year. Its Employee Engagement Index rose to 66.8 from 58.2.

The bank expects Uganda’s economy to expand by about eight percent over the medium term, supported in part by anticipated commercial oil production. The outlook, however, remains exposed to global economic uncertainty and fluctuations in energy prices.

Source: FSX Business News