Central Bank Rate likely to stay unchanged

By Samuel Sanya

Bank of Uganda raised CBR to 10% in October 2018.

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The Bank of Uganda is unlikely to alter its benchmark Central Bank Rate (CBR) when the monetary policy committee meets on Wednesday, a former Central Banker has said.

Bank of Uganda raised CBR to 10% in October 2018.

Stephen Kaboyo, the CEO of Alpha Capital Partners, a former Central Banker himself said: “Gathering from the October CBR direction, it was obvious that BOU was concerned by the inflation outlook coupled with the depreciation of the shilling at the time.”

“With the passage of time, the shilling has stabilised and continue to show an appreciation trend, while inflation seems to be somewhat subdue. Growth looks set at 6%, while private sector credit increased to 12.2% going by September numbers,taking all this into account, BOU may not have sufficient justification to tighten this time round and will likely keep the CBR unchanged, however the statement is likely to come out with a hawkish tone given BOU’s credentials on inflation,” he explained.

Bank of Uganda is set to make its announcement on CBR for the months of December and January 2019 at noon on Wednesday.