Uganda leaves key rate unchanged at 10pc

February 7, 2019 in Business, Finance, Markets, Policy by Editor

Bou Governor, Prof. Emmanuel Tumusiime Mutebile chairs the MPC

The Bank of Uganda’s Monetary Policy Committee (MPC) has left its key policy rate unchanged at 10pc for the second time, citing a shaky inflation outlook. Annual inflation peaked at 2.7pc in January from 2.2 percent in December, the first such rise in five months.

The CBR has been held at 10pc at two previous sittings of the MPC since it was first raised by 100 basis points last October. The rate plateaued out at 9pc earlier early last year as the central banker struggled to rejig commercial bank credit.

The bank is still holding on its economic growth projection of 6.3pc for fiscal 201/19 buoyed by public spending and a liberal monetary stance. The weather and budget performance remain underside risks however.

Uganda’s rate is 100 basis points higher than the rate adopted by neighbouring Kenya which also announced a rate of 9pc last week.

Even before the latest announcement, lenders had began an upward adjustment to their prime rate. Stanbic Uganda, known for the lowest prime in the market adjusted its rate from 17pc to 18pc.