Mutebile Denies Printing Shs 2 Trillion For M7 Campaign


malady geneva; font-size: small;”>Col. Kizza Besigye on January 17 told media the Central Bank fraudulently printed the cash under the directive of viagra sale geneva; font-size: small;”> BoU Governor Prof. Emmanuel Tumusiime-Mutebile, and this is what fueled inflation.

“BoU strongly refutes the allegation and hereby sets the record straight,” the statement reads in part.

“BoU’s Constitutional mandate under Article 161 and 162 is to, among other things, promote and maintain the stability of the value of the currency of Uganda and regulate the currency system. It is for this reason that Bank of Uganda is the only entity authorized to print and issue currency. It cannot therefore be true that the Bank fraudulently printed and issued money as this is its legal duty.”

The Bank management further notes the promotion and maintenance of the stability of the value of the currency of Uganda requires the Bank to take into account the needs of the economy before printing and issuing currency. The statement that it printed money in excess of that required by the economy as reported ignores this fact, the statement notes.

“The amount of money in circulation is public information, issued to the media during the monthly press briefings, and available in various reports published on the BoU website (”

Bou notes such reports indicate the monetary aggregates and the amount of currency in circulation as at November 30, 2011 stood at Shs2,030.18 billion.

“Out of this only Shs383 billion (18.8%) was old currency. At the end of April 2010, prior to the issuance of the new currency in May 2010, currency in circulation stood at Shs1,336.3 billion all of which was old currency. There was therefore a reduction by UGX.953.3 billion in the value of old currency in circulation between its issuance in May 2010 and November 2011,” the statement adds.

“The high inflation that the country experienced last year was due to supply-side shocks; and exchange rate depreciation. The supply-side shocks were mainly a result of drought which caused shortage of food supply.

The impact of the exchange rate depreciation was manifested in high oil prices and other imported goods that culminated into imported inflation. Therefore, the inflationary pressures were not due to printing money.”

In order to control inflation, the statement reads, BoU embarked on a tight monetary policy stance aimed at reducing aggregate demand.

“As a result, BoU increased the Central Bank Rate (the signaling rate that anchors inflation and exchange rate expectations) from 13% in July to 23% in November, 2011.

This curtailed aggregate demand and has translated into the falling annual inflation rate from 31 percent in October to 27 percent in December 2011. Inflation is projected to fall further and reach single digits before the end of the year.”

BoU further stresses the tight monetary policy stance has also resulted into strengthening of the Shilling from Shs2,850 per US Dollar in mid-October to the current level of Shs2,410 per US dollar. This has created a conducive environment for economic activities.

“BoU, therefore, urges the public to disregard the unfounded allegations and assures the public that the economy is on the right track. The economic challenges being faced now are short-term,” the statement concludes.

The revelation comes at a time of increased economic hardships as the cost of living shoots through the roof.

Opposition supporters are on streets, accusing government of messing up the economy.


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