Uganda Keeps Lending Rate at 9.5%
Uganda’s apex bank maintained the status quo on its benchmark lending rate at 9.5 per cent on Wednesday, saying the risks to inflation have persisted despite easing food prices. The decision to keep the rate at 9.5% was the second “hold” decision in a row.
Inflation rose to 2.6% in November from 2.4% the prior month, ending a nine-month disinflationary trend, Michael Atingi-Ego, deputy governor at the Bank of Uganda, told a news conference in Kampala.
“The inflation outlook reflects a higher path for energy prices in the medium term,” he said, adding that the depreciation of the local currency and escalating geopolitical tensions could also pressure prices.
“Although the outlook for both inflation and economic growth is favourable…keeping Central Bank Rate unchanged is necessary to anchor inflation around the target in the medium term while at the same time supporting growth in private sector investment,” Atingi-Ego told a press conference.
He said economic growth of 6% was forecast in the 2023/24 fiscal year, increasing slightly to between 6% and 7% in the medium term.
Risks to the growth outlook included slower-than-expected global and regional growth, tight fiscal policy that could restrict development expenditure and tight credit conditions which could constrain private sector investment, Atingi-Ego added. Naira Devaluation Deepens Economic Crisis in Nigeria
