Bank of Uganda Reduces Policy Rate to 10 Percent in June 2017

Bank of Uganda Reduces Policy Rate to 10 Percent in June 2017

June 23, 2017 No Comments

Share with:


The Bank of Uganda (BoU) has reduced the Central Bank Rate (CBR) by 1 percentage point to 10 percent in June 2017. The band on the CBR has been maintained at +/-3 percentage points and the margin on the rediscount rate at 4 percentage points on the CBR.

The Governor at a press conference held on Monday, June 19 2017 , announced a further reduction of the Central Bank Rate (CBR) by 1 percentage point from 11 percent to 10 percent. The rationale for further easing of monetary policy is based on; the forecast that inflation will stabilize around the target of 5 percent within 12 months, and to support economic growth.

Below are the salient features that stand out in today’s Monetary Policy Statement:

Inflation:

There was an increase in both headline and core inflation, with the former increasing to 7.2 percent in May 2017 from 6.8 percent in April 2017, on account of a sharp increase in food crops and higher energy prices. Core inflation only increased by 0.2% to 5.1% due to a stable exchange rate and subdued domestic demand.

Economic Growth:

Estimates show that the economy will grow by 3.9 percent in the Financial Year 2016/17, down from 4.7 percent in the Financial Year 2015/16. The slowdown is mainly due to the drought affected agricultural production, weak private sector credit growth and the slow implementation of public investment projects. Projections for Financial Year 2017/18 however, indicate that  economic growth will pick up to 5.0 percent

Monetary Policy statement for June 2017

 

Leave a Reply

Connect with:



Skip to toolbar