The Bank of Uganda raised the cash reserve requirement for commercial banks to 13.5% from 11%, effective September 24, according to a September 15 circular. The move aims to defend the Ugandan shilling as it continues to slide against major currencies. By increasing the amount of funds banks must hold in reserve, the central bank seeks to tighten liquidity in the financial system and support the local currency.

The decision comes amid ongoing pressure on the shilling, reflecting broader economic challenges facing the East African nation. Commercial banks will need to adjust their reserve holdings immediately to comply with the new requirement.