BoU Governor, Prof. Emmanuel Tumusiime-Mutebile
The Bank of Uganda (BoU) has reduced the Central Bank Rate (CBR) by 0.5% to 6.5%. CBR is a benchmark lending rate for commercial banks.
BoU Monetary Policy Committee noted that economic developments have been broadly in line with the outlook in the April Monetary Policy Report.
In a statement, BoU Governor Prof. Emmanuel Tumusiime-Mutebile says high frequency indicators of economic activity indicate that the momentum of economic activity for the quarter to May 2021 was moderate.
On why BoU reduced the CBR, Mutebile notes that “…the economic recovery continues to require monetary policy support until economic slack is absorbed so that the 5 percent inflation target is sustainably achieved.”
The MPC assessed that the risks to the economic growth outlook are still on the downside, that there remains considerable excess capacity in the economy, sectoral unevenness of economic recovery, and a weak level of business investment.
