Bank of Uganda (BoU) Governor Prof. Emmanuel Tumusiime-Mutebile will today release the Monetary Policy Statement for the month of October.
According to analysts, BoU is likely to keep the Central Bank Rate (CBR), a benchmark lending rate for commercial banks, unchanged at 10% considering the realities on the ground.
“The inflation readings for the previous month showed a slight edge up in both headline and core. It is likely BoU could view this as transient and don’t focus too much on it,” Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners says.
He adds: “On the face of current realities whereby the economy has experienced a deterioration of consumer and business sentiment, with growth contraction, the monetary authorities will be faced with the challenge of balancing the two objectives. In my view the growth challenge will take precedence in the policy discussions.”
It should be noted that BoU kept the CBR at 10% in August on account of low inflation levels and a boost in economic activity.
Uganda’s Annual Headline Inflation for the year ending September 2017 was recorded at 5.3 percent compared to the 5.2 percent reported during the year ended August 2017.
This represents a 0.1 percentage point increase from the previous month. This is slightly above Bank of Uganda’s target of 5%.
On the other hand, Annual core Inflation was recorded at 4.2 percent for the year ending September 2017 compared to 4.1 percent for the year ended August 2017.
