Business
BOU says economy to weather emerging market capital flight
Publish Date: Feb 06, 2014
BOU says economy to weather emerging market capital flight
Governor Emmanuel Tumusiime-Mutebile
  • mail
  • img
newvision

NAIVASHA - The capital flight from emerging and frontier markets sparked by the United States starting to withdraw its stimulus measures is unlikely to have a severe impact on the Ugandan economy, the east African country's central bank chief said on Wednesday.

Sentiment towards emerging markets has been fragile since the U.S. Federal Reserve announced it will cut back its stimulus programme, with many investors betting the dollar will continue to gain against emerging and frontier market currencies.

Governor Emmanuel Tumusiime-Mutebile said "there will be fewer off-shore investors in the foreign exchange market" in the wake of the Fed's tapering programme but added that many foreigners will continue to invest in the rest of Uganda's economy, one of east Africa's fastest growing.

"Don't forget that the rate of return from these investments is far higher in Uganda than in the United States but the same is not true of money," Tumusiime-Mutebile told Reuters on the sidelines of mobile money conference in Kenya.

"Those who are coming to invest in short-term money markets will go, yes".

The Ugandan central bank held its benchmark lending rate at 11.5 percent earlier this week but some banking analysts said the low rate of credit supply in the economy could lead to rate cuts in the near to medium term.

Tumusiime-Mutebile said this was not necessarily the case.

"Actually, lending in dollars is doing very well but lending in local shillings is not doing well. So on balance the economy is not affected," he said.

Reuters

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
MTN tops most admired, valuable African Brand
MTN has again topped the Brand Africa 100® list as the most admired and most valuable African Brand. At over $5.4b, MTN is the only African brand valued over a billion dollars....
17 business personalities awarded American honorary doctorates
A group of 17 personalities with footprints in business and humanitarian circles, have been awarded honorary philosophy doctorates in humanities by an American institution, for positive transformation of society....
Egypt to offer projects to domestic, foreign investors
Egypt will offer a slew of projects to domestic and foreign investors at a conference in March aimed at kick-starting an economy battered by years of political unrest....
Students’ involvement in investment negotiations is key
University students have been urged to get involved in negotiations of trade, bilateral and investment agreements rather than leaving it to technocrats and politicians....
Practices to add to your daily business schedule
At the end of each day’s work, find time to identify three things that went well. Once you identify them, ask the critical question such as, “Why did ‘X’ go well?”...
Dubai insurer set for Uganda
The new firm will enter into strategic partnerships to oversee, design, and control processes of selected licensed brokers....
Should Govt lease parts of Lake Victoria to private developers?
Its Ok
No Way
Not Sure
follow us
subscribe to our news letter