The EAC central bank governors have unanimously reiterated the need to rebuild foreign currency reserves and the strengthening of financial sector regulatory frameworks to ensure stability. 

Central Bank governors have underscored the need to put in place safeguards to mitigate imminent risks facing emerging economies in the wake of the of unconventional monetary policies by the US Federal Reserve Bank and Britain’s exit from the European Union (Brexit). 

According to a statement, the governors agreed to the suggestions during the 20th ordinary meeting of the EAC Monetary Affairs Committee (MAC) in Kampala, recently. 

The meeting was hosted by the Bank of Uganda and chaired by the Governor of Bank of Tanzania, Prof Benno Ndulu who is the current chair of MAC. 

Other governors present included Uganda’s Emmanuel Tumusiime Mutebile, Central Bank of Kenya Patrick Njoroge, Bank of the Republic of Burundi Jean Ciza, and National Bank of Rwanda Governor John Rwagombwa. 

Prof Ndulu said: “The global demand dynamics and the risk of isolation of EAC financial systems are likely to adversely impact partner states, capital flows, trade and investment, exchange rates and overall macroeconomic stability.” 

The meeting among other things reviewed the progress on the implementation of the decision of the 19th ordinary MAC meeting held in Zanzibar, in August on the exchange rate developments and one on required policy response that took place in Arusha in December last year. 

Prof Ndulu said the governors are committed to the EAC integration process and noted that commendable progress has been made in implementing previous MAC decisions. 

He cautioned that while the legal frameworks for establishing institutions to support the establishment of the EAC monetary Union have advanced there is still a need for the process to be fast tracked if the monetary union is to be achieved by 2024.

He added that that the Central Bank governors have commended the progress achieved in other areas of harmonisation of Monetary Policy Frameworks.