Uganda c. bank cuts rates

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By Aya Anwar
The Bank of Uganda (BoU)

Bank of Uganda has cut its benchmark interest rate for the second consecutive time, marking the first back-to-back rate reduction in four years. The rate was lowered from 10 to 9.75 per cent, reflecting an improved inflation outlook, according to Deputy Governor Michael Atingi-Ego.

At a virtual briefing on Monday, Atingi-Ego emphasised that while inflation risks are balanced, a cautious monetary policy remains necessary to sustain inflation control and foster socio-economic growth. Both annual and core inflation rates have dropped below the central bank’s 5 per cent target, standing at 3 and 3.7 per cent respectively in September.

Atingi-Ego attributed the subdued inflation to the easing of global shocks, a stable exchange rate supported by strong coffee exports, and prudent monetary measures. Uganda’s currency, the shilling, has appreciated by nearly 4 per cent against the dollar since June, further aiding in inflation management.

Attribution: Bloomberg

Subediting: M. S. Salama

 

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