East African Central Banks Diversify Reserves Amid Oil Price Volatility

East African central banks are taking steps to diversify their foreign exchange reserves in response to geopolitical conflicts and volatile oil prices. At the 29th Ordinary Meeting of the East African Community (EAC) Monetary Affairs Committee, governors agreed to purchase domestically produced gold and increase remittance inflows. The move aims to strengthen external buffers and support infrastructure investment amid a challenging global economy.

The meeting was attended by central bank governors from Uganda, Kenya, Tanzania, Burundi, South Sudan, Somalia, Rwanda, and the Central Bank of Congo. They acknowledged that macroeconomic stability is threatened by spillover effects from geopolitical conflicts, particularly in the Middle East, which have fueled concerns over global crude supplies and lifted oil prices.

Rwanda's Chief Economist Thierry Mihigo Kalisa emphasized the need for central banks to remain flexible in response to external shocks. The committee also agreed to accelerate the East African Monetary Union roadmap by establishing a peer review mechanism to strengthen macroeconomic surveillance.