Michael Atingi-Ego, the BoU Deputy Governor
Bank of Uganda’s Monetary Policy Committee on Thursday maintained the Central Bank Rate (CBR) at 9.75% in order to control inflation while fostering Uganda’s economic growth and socio-economic transformation. The CBR is a benchmark lending rate for commercial banks.
While issuing the Monetary Policy Statement, Michael Atingi-Ego, the BoU Deputy Governor, said although inflation is expected to rise in the near term, it will return to the target (of 5%) in the medium term.
“Uncertainties from global developments could cause inflation to rise faster and disrupt ecumenic activity. This situation necessitates a cautious approach to monetary policy,” said Atingi-Ego while maintaining the CBR at 9.75%.
He said economic growth is still projected at 6.0%-6.5% in FY 2024/25 and 7.0% in the outer years, supported by macroeconomic environment, foreign direct investment towards the extractive sector, strategic government interventions aimed at wealth creation, increased agricultural production, and anticipated oil revenue.
He however said this growth could be lower than projected if adverse weather conditions hinder food crop harvests; tight financing conditions and the need for more budget financing due to reduced external financing of projects; global developments including heightened risks of trade conflicts as well as disruption of trade and supply chains, result in slower global growth; and global financial conditions tighten due to emerging challenges, adversely affecting the Ugandan economy.
