BoU Further Slashes Lending Rate To 19%

mind geneva;”>Addressing press today, Bank of Uganda Deputy Governor Louis Kasekende said inflation was set to fall faster in the coming three months.

“Though we are still faced with low aggregate demand, I can assure you the core rate of inflation will be in single digits by the end of 2012,” said Kasekende.

BoU in June slightly eased its monetary policy stance and reduced the Central Bank Rate (CBR) to 20 percent from 21 percent in May.

The Central Bank governor Prof. Emmanuel Tumusiime-Mutebile, while releasing the Monetary Policy Statement for June 2012 to the press explained that the decision was driven by improved short to medium term prospects for inflation.

The Uganda Bureau of Statistics (UBOS) monthly report had earlier showed that annual headline inflation had fallen to 18.6 percent in May, down from 20 percent in April.

UBOS Macro-economics director Dr Chris Mukiza said then that a sustained increase in food supply and subdued aggregate demand in the economy had helped in curbing inflation.

“Last year around this time, prices were rapidly going up, however, this year prices are relatively low and as a result we are seeing the inflation rate consistently falling,” said Kwizera.


Ugandans have since been worried of borrowing from banks, fearing an increase in the lending rates.

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