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
African Parliament warns on donor dependency
Members of the Pan African Parliament have warned African Union (AU) member countries against relying on donors to foot the organisation’s budget....
Ministry worried about reducing fish stocks
The ministry embarks on rigorous sensitization of masses to help avert depletion of fish stocks in the various lakes....
Hearing of case for Otunnu’s removal for today
The hearing of the case in which UPC MPs want court to remove the party president Olara Otunnu is scheduled to take place today in the High Court....
Youth minister Anite wants children
The state minister for youth in charge of children's affairs has pledged to advocate for the passing of the Children's Amendment Bill....
Oil tanker crash kills female driver, injures two
A petroleum tanker crashed into a house in Dokolo on Friday afternoon killing the female driver instantly and injuring the co-driver and two others on the ground....
Palm Sunday celebrations from the Vatican in pictures
Christians around the world have Sunday celebrated the end of the Lenten season by marking Palm Sunday....
Should police arrest parents who do not take their children to school?
Yes
No
Can't Say
follow us
subscribe to our news letter