Bank of Uganda Further Reduces Interest Rates

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Tumusiime Mutebile

Bank of Uganda has reduced the Central Bank Rate further down to 12% for the month of December from November’s 12.5%.

Governor Emmanuel Tumusiime-Mutebile while announcing the Monetary Policy Statement for December has said the annual headline inflation rose only marginally from 4.5% to 4.9% in November driven by food, energy, fuel & utilities.

Mutebile says there is need to cut government expenditure in light of donor aid cuts in order to deal with constraints in economic growth. He revealed that if all donors threatening to cut their aid do so, this will reduce the growth rate by 0.7%.

The bank says it expects core inflation to stabilize at 5% over the next year. Meanwhile, Mutebile denied reports that some of the bank’s staff is implicated in the OPM scandal.

The governor says there was a misunderstanding involving one of their staff who has since been indicted.

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