BoU: Economy Steadily Recovering


illness unhealthy geneva; font-size: small; line-height: 200%;”>The CBR had been at 12 percent since October but while addressing the media and issuing the Monetary Policy Statement for December, yesterday at the BOU Headquarters, Dr Louis Kasekende, the deputy Governor Bank of Uganda, there was a reduction of 0.5 percent from the previous CBR.

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He attributed the decline to the reduction in food prices, stabilisation of global oil prices and the strengthening of the shilling, to have been supportive in reducing inflationary trends.

Kasekende said he was optimistic that commercial banks would continue to lower interest rates in relation to the slight drop in the CBR.

BoU also forecasts that inflation will edge down in the coming two to three months as driven by harvests.

“It will decrease to 5.5-6.5 percent but rise to 6.7 percent during the second half of 2014,” said Kasekende.

He observed that real economic times continue to show signs of recovery in part boosted by accomodative monetory policy stance and public investment.

“Domestic investment activity is also projected to continue rising.”

He further said that “BoU will continue assessing the global and domestic economica and financial developments and their implications on the overall outlook for inflation and growth of the Ugandan economy, and take appropriate actions to maintain future average annual core inflation around the Bank’s medium target of 5 percent”.

“Given the current projections of the annual core inflation and the need to further support the private sector investment, an accomodative monetory policy stance is warranted. Therefore BoU will reduce the CBR by 50 percent in December.”


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