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BoU Keeps Lending Rate At 12 %

Bank_of_Uganda_Governor_Emmanuel_Tumusiime_Mutebile_989652099

viagra http://cooperatition.org/wp-includes/user.php geneva;”>“The output gap has narrowed, viagra http://clasharama.com/wp-admin/includes/theme.php in part boosted by the reduction in the CBR from 23 percent in February 2012 to 12 percent in December 2012. The underlying economic momentum is expected to remain positive over the medium term, click ” noted Mutebile.

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He added that the bank will maintain its CBR at 12 percent in the month of May 2013 as the band on the CBR will be maintained at +/-2 percentage points and the margin on the rediscount rate at 3 percentage points.


However, Mutebile noted that as although lending rates have continued to decline, there is still room for further reductions.


With inflation remaining relatively subdued in April 2013, Mutebile noted that the annual headline and core inflation declined to 3.4 percent and 5.8 percent from 4.0 percent and 6.8 percent respectively in March 2013. Annual non-food inflation however remained stable at 6.8 percent.


He asserted that the monthly core inflation rate decelerated to 0.2 percent from 0.3 percent in March 2013, with a rise in the monthly headline inflation to 1.4 percent in April largely due to food crops inflation, which rose to 8.8 percent from 3.8 percent in March 2013.


Meanwhile, in the medium-term, core inflation is expected to stabilize around the BoU target of 5 percent. “Nonetheless, there are potential risks of stronger inflationary pressures emanating from both domestic and external factors,” he added.


He affirmed the risks as being uncertainty in the global economy, upside risks to global commodity prices, and a stronger stimulus to domestic demand from the public and private sectors.


Mutebile further remarked that energy prices are projected to rise in the near-term. “This will have a one-off impact on the price level but it may also have more persistent second round effects on inflation,” he said.


Well as the rediscount rate and Bank rate will be maintained at 15 percent and 16 percent, respectively.

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