Prof. Emmanuel Tumusiime-Mutebile, the BoU Governor will issue the MPS today
The Bank of Uganda will today Monday June 8, 2020 issue the Monetary Policy Statement (MPS) for June 2020 where it is expected to cut the Central Bank Rate (CBR) further.
The CBR is a benchmark lending rate for commercial banks.
The MPS will be released after BoU’s Monetary Policy Committee (MPC) meeting scheduled for today.
Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners says that during the upcoming MPC, the odds are that BoU will slash the policy rate for June.
“The decision will primarily be driven by the mounting fears of marked economic slowdown due to COVID pandemic, this will come against the backdrop of cooling domestic economic activity that is expected to hurt growth prospects coupled with subdued inflationary pressures in the recent months,” Kaboyo told Business Focus.
He added: “In my view, I expect the statement to be embedded in a hawkish language, it will highlight the expected turbulence in the months ahead as effects of the pandemic weigh on domestic and external activity.”
In April 2020, BoU cut the CBR by 1 percentage point to 8 percent, up from 9 percent.
In the Monetary Policy Statement for April, Prof. Emmanuel Tumusiime-Mutebile, the BoU Governor said the CBR reduction was necessary given the deterioration in macroeconomic conditions and the need to ensure adequate access to credit and the normal functioning of financial markets.
