Uganda central bank holds rates, says concerned about lending
Publish Date: Apr 02, 2014
Uganda central bank holds rates, says concerned about lending
Bank of Uganda Governor Emmanuel Tumusiime-Mutebile
  • mail
  • img

KAMPALA - Uganda's central bank left its key lending rate unchanged on Wednesday, even though inflation rose last month, citing concern about sluggish credit growth and weak exports.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile said the economy is expected to grow 6 percent in the fiscal year 2013/2014, compared with 5.8 percent the fiscal year before. Growth should rise to 6.5 percent next fiscal year, he said.

"Given the outlook for the macro economy over the next 12 to 18 months, the Bank of Uganda believes that a neutral monetary policy stance is warranted in April 2014," Tumusiime-Mutebile told a news conference.

Inflation, however, rose to 7.1 percent in March from a revised 6.8 percent a month earlier, the Uganda Bureau of Statistics said on Monday. It was the first time inflation had edged above 7 percent since October 2013.

Tumusiime-Mutebile said annual core inflation is forecast to increase gradually over the course of next 12 months, to a range of 6 percent to 7 percent by April 2015.

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

Tumusiime-Mutebile added that one of the main headwinds to the economy was the growth in commercial lending.

"Growth of commercial bank credit to the private sector picked up slightly in February 2014 but remained sluggish, with year-on-year growth at 6.8 percent, which was below the Bank of Uganda projections at the beginning of 2013/14," he said.

Traders said the central bank was prudent to hold rates.

"We think a rate hold was possibly the right move, because although there was a rise in inflation, the more urgent need is to boost the growth momentum, which would have been undermined by a rate hike," said Faisal Bukenya, head of market making at Barclays.


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

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Uganda tipped on oil and gas
It is now close to a decade since the first commercially viable oil deposits were confirmed in Uganda. But the wait for the country’s first oil barrel is still on, much to the chagrin of oil companies on the local scene....
Uchumi Supermarkets closes some outlets in Kampala
Uchumi Supermarkets has closed two branches in Uganda as part of re-organisation to stabilize the business....
Women to meet over leadership
About 200 women from various organisations converge this week for the fourth annual conference on women and leadership....
Ugandan on the “Africa is not Ebola” campaign
Uganda’s tourism promoter, Amos Wekesa has been appointed to the global “Africa is not Ebola” campaign that is helping to rebuild the image of the stunning continent....
Board members of the Uganda Electricity Generation want the contractors of 600mw Sinohydro Karuma Hydro Power Project to put emphasis on the health and safety of workers....
How to add value to Doodo farming
Amaranth is a high nutritional value crop rich in proteins , essential fatty acids and micronutrients....
Should Makerere University fees policy be reviewed?
Can't Say
follow us
subscribe to our news letter