Regulatory Alerts2022-05-01
Adjustment to the Cash Reserve Requirement and Net Open Position in Foreign Currencies
The Bank of Uganda has raised the cash reserve requirement for commercial banks by two percentage points, increasing it from eight percent to ten percent. The circular simultaneously caps the net open position in foreign currencies at ±10% of core capital, consistent with Section 42, 1b of the Financial Institutions Act. These changes become effective on June 23, 2022, and require all commercial banks to implement the new thresholds immediately.
BANK OF UGANDA
OFFICE OF THE EXECUTIVE DIRECTOR SUPERVISION
37-45 KAMPALA ROAD, P.O. BOX 7120, KAMPALA
DIRECT LINE: 256-414-230051 GENERAL LINE: 256-414-258441 Ext 2403 FAX LINE: 256-414-258515 TELEX: 256-414-61059
CABLES: UGABANK Email: info@bou.or.ug Website: www.bou.or.ug
EDS.306.2
June 16, 2022
CIRCULAR TO ALL CHIEF EXECUTIVES OF COMMERCIAL BANKS
Adjustment to the Cash Reserve Requirement and Net Open Position in Foreign Currencies
This is to inform you that Bank of Uganda has made the following adjustments:
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Revised the Cash Reserve Requirement by 2 percentage points from 8 percent to 10 percent.
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Set the maximum limit for the Net Open position in the foreign currencies at ±10% of core capital of the financial institution, in line with Section 42, 1b of the Financial Institutions Act (FIA).
These adjustments shall take effect from 23rd June 2022 and all Commercial Banks are requested to comply.
[Signature]
Tumubweinee Twinemanzi, PhD Executive Director Supervision
Copy: Deputy Governor Executive Director Operations Director Commercial Banking
Mission: To Foster Price Stability and a Sound Financial System | Vision: To be a Centre of Excellence in Upholding Macroeconomic Stability