Bank of Uganda Raises Cash Reserve Requirement to 13.5%

KAMPALA — The Bank of Uganda (BoU) has increased the Cash Reserve Requirement (CRR) for commercial banks from 11 percent to 13.5 percent, in a move aimed at strengthening liquidity management and improving the effectiveness of monetary policy transmission.
According to a circular dated September 15, 2026, and signed by David L. Kalyango, Executive Director, Supervision and Regulation, the revised requirement will take effect from the reporting cycle beginning September 24, 2026.
The central bank said the adjustment is intended to support prudent liquidity management while enhancing the effectiveness of monetary policy in line with prevailing macroeconomic and financial sector developments.
“The revised cash reserve requirement shall take effect from the reporting cycle commencing on 24th September 2026,” the circular states.
The CRR is the proportion of customer deposits that commercial banks are required to keep as reserves with the central bank rather than making the funds available for lending or other investments.
The increase means commercial banks will be required to hold a larger share of their deposits as reserves at BoU.
BoU said all commercial banks are expected to take the necessary measures to ensure full compliance with the revised requirement from the effective date.
The move comes amid ongoing discussions about liquidity conditions in Uganda’s financial system and questions over how available liquidity is translating into credit and economic activity.
The central bank, however, said it remains committed to maintaining a stable and resilient financial system and will continue assessing market conditions, with further actions to be taken if necessary.
The latest adjustment also comes against a backdrop of changing macroeconomic conditions. Recent reporting has pointed to rising inflationary pressures and the possibility of further monetary-policy adjustments as authorities seek to balance price stability with economic growth. �
Monitor
What the change means
With the CRR rising by 2.5 percentage points, commercial banks will have less of their deposit base immediately available for lending, all else being equal.
The policy could therefore affect banks’ liquidity management and the amount of funds available for credit, although the actual impact will depend on banks’ existing liquidity positions, deposit growth, lending demand and other monetary-policy measures.
The latest decision is part of BoU’s mandate to promote monetary and financial stability in Uganda.