National
Central Bank holds key lending rate at 11 precent
Publish Date: Mar 04, 2014
newvision
  • mail
  • img

Uganda's central bank held its key lending rate at 11.50 percent on Tuesday, but said a decline in foreign aid was a source of uncertainty for the economy.

The Ugandan shilling has come under pressure since some Western countries and funding agencies announced aid cuts last week in response to President Yoweri Museveni's signing of an anti-homosexuality law.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile said the bank would continue to intervene in the foreign exchange market to stem volatility as it had sufficient reserves to do so, amounting to about $3 billion.

"The magnitude and timing of possible declines in foreign aid are also a source of uncertainty for the balance of payments and the economy," Tumusiime-Mutebile told a news conference.

"We only intervene when we think it's necessary and the bank has adequate foreign reserves to intervene in our markets whenever necessary."

The central bank has held its key lending rate since cutting it to 11.50 percent in December.

Tumusiime-Mutebile said on Tuesday that there was potential risk from higher inflation especially from the shilling's depreciation and high food prices.

The year-on-year inflation rate dipped to 6.7 percent in February from 6.9 percent a month earlier, pushed lower by a slowdown in non-food costs.

Tumusiime-Mutebile said core annual inflation would be in the 4-5 percent range in the next few months, and increase to between 5.5 percent and 6.5 percent over the next 12 months. 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
New Kampala-Jinja highway designs nearly ready
Designs for the $800m (about sh2 trillion) eight-lane 80km Kampala–Jinja Express Highway are nearing completion, says the spokesperson for Uganda National Roads Authority....
NRM assures opposition on reforms
The ruling party has assured the opposition that it is committed to the necessary electoral reforms for credible elections in 2016....
Amuru district: 300 land disputes in one week
Over 300 land disputes have been recorded in the northern Uganda district of Amuru during a five-day free legal service week....
Judiciary introduces plea bargain sessions
The judiciary is in the process of introducing plea bargain practice directions in criminal justice mainly to decongest prisons....
EA media managers want reforms in journalism curriculum
Media managers in East Africa have asked journalism training institutions in the region to consider changing the curriculum from one which focuses on theories to a skill-based approach....
UPDF mourns Congolese general
The UPDF is mourning the death of their Congolese comrade, Maj. Gen. Ambamba Bahuma, who has been instrumental in fighting the Uganda rebel Allied Democratic Front (ADF) in North Kivu Province Democratic Republic of the Congo (DRC)...
Do you think banning the sale of single cigarette sticks will help regulate tobacco production?
yes
No
Can't Say
follow us
subscribe to our news letter