World Economy

Uganda Reduces Key Rate to 13%

Uganda Reduces Key Rate to 13%Uganda Reduces Key Rate to 13%

The Bank of Uganda lowered its benchmark interest rate by 100 basis points to 13%, saying slowing inflation gave it room to support flagging growth. Two of three analysts surveyed by Bloomberg predicted the reduction, while one expected policy makers to keep the benchmark rate at 14%. The monetary policy committee has cut the rate by a total 300 basis points in the past three meetings. “Given that core inflation is forecast to remain around the medium-term target of 5% over the next 12 months, there is room to support the domestic economic growth momentum especially against the global economic slowdown,” Governor Emmanuel Tumusiime-Mutebile told reporters in the capital, Kampala. “Therefore, the BOU believes that there is scope to ease monetary policy.” Headline inflation, which includes food and fuel prices, could trend upward as drought pushes the cost of food higher, the governor said. Uganda may lower the central bank rate by another percentage point at the next meeting in December, according to Razia Khan, head of Africa research at Standard Chartered Bank Plc.


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