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Central Bank maintains lending rate at 10%

By Ali Twaha

Added 1st April 2019 04:27 PM

The economy is projected to be operating around its potential economic growth of 6-6.5%, says Bank of Uganda.

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The economy is projected to be operating around its potential economic growth of 6-6.5%, says Bank of Uganda.

FINANCE

KAMPALA - The Central Bank has maintainted its key lending rate to commercial banks at 10%, as key economic indicators indicate a relatively stable economic environment.

Here is the full statement by the bank:

 

In February, the Monetary Policy Committee at the Central Bank kept its benchmark lending rate at 10%.

According to Stephen Kaboyo, managing director at Alpha Capital Markets despite the sudden jump in core inflation seen in March driven by motor vehicle and foot wear prices, inflation expectations remain well balanced.

“As Bank of Uganda considers the policy direction for April 2019, there are a number of positive that will be brought into account that will likely sway them to continue with a patient approach of maintaining a neutral policy stance," he had said earlier.

“Other indicators such as private sector credit has been growing, while the Uganda shilling has been relatively stable since the last policy announcement, with slight spikes in demand that has by and large evened out.

"All these factors put the economy in a fairly good place and gives Bank of Uganda adequate headroom to keep policy where it is," Kaboyo added.

Growth momentum in the economy is holding, with expansion in the last half of 2018 going into 2019 driven by investments in public infrastructure, improved agricultural output and services sector.



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