Bank of Uganda has at last joined its counterparts around world in pulling all stops as the country braces for the worst impact of the global pandemic that is Covid19 (Coronavirus).
The Central Bank on Friday announced a list of emergency measures that include liquidity injection into badly affected commercial banks, with the aim of stabilizing confidence.
Governor Professor Tumusiime Mutebile said in a statement that the Central Bank will among others “Provide exceptional liquidity assistance for a period of up to one year to financial institutions supervised by BoU that may require it”
Bank of Uganda, Mutebile added, will also continue to engage Mobile Network Operators (MNOs) and commercial banks to further reduce fees on mobile money transactions and other digital payment charges in order to limit the use of cash and bank branch visits.
The networks are also being asked to increase daily transaction and wallet size limits for mobile money transactions.
The country’s leading telecom MTN has already announced zero charges on mobile money transactions not exceeding Shs 30000, while Airtel Uganda reportedly suspended charges on all transactions.
In other interventions, Bank of Uganda has committed to waive limitations on restructuring of credit facilities at financial institutions that may be at risk of going into distress due to the OOVID-19 pandemic.
The bank will also intervene in the foreign exchange market to smoothen out excess volatility arising from the global financial markets.
According to Mutebile, while no known single coronavirus case has been recorded in Uganda, the impact of COVID-19 outbreak on the economy is already visible.
“Manufacturers and traders who rely on supplies, especially from China and Europe, are facing challenges. Tourism, a major source of foreign exchange earnings, is shrinking on account of declining demand, and expanding restrictions travel to and from a growing number of countries abroad and overseas,” he said.
“The volatility in the global financial markets has resulted in offshore investors exiting the frontier and emerging markets including Uganda, into safe havens. These factors pose a risk to financial stability and overall economic growth.”
Yesterday, Finance Minister Hon Matia Kasaija about 800,000 Ugandans are like to sink into abject poverty because of his crisis in the short run, while this number might exceed 2million in the long run.