In some countries, where the private sector has borrowed heavily in foreign currency denominated loans, exchange rate depreciation has been damaging because of its negative impact on private sector balance sheets, but this is not a major cause for concern in Uganda. Exchange rate flexibility is an important tool to help the economy adjust to an external shock.
But even if markets will have stabilized, debt stabilization will require many years of substantial primary surpluses. BIS central bankers’ speeches  5  –    The fourth lesson to be learned from the crisis is therefore that we need to improve fiscal policy frameworks.