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Bank of Uganda Cuts Lending Rate to Lowest Level Since 2011

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Bank of Uganda has reduced the Central Bank Rate (CBR) by one percentage point between April and June.

In June, CBR was at 11 per cent but on Monday Bank of Uganda further cut the rate to 11 per cent.

Central Bank governor Emmanuel Tumusiime Mutebile says the cut will address inflationary pressures and support economic recovery.

“With domestic inflation pressures remaining subdued and given the continued weak growth prospects, the BoU judges that continued easing of monetary policy is appropriate,” Mutebile said while presenting the monetary policy statement for June in Kampala on Monday.

“This will be consistent with achieving the core inflation target of five per cent over the medium-term and will also support the recovery of real output in the economy.”

Since April 2016, the CBR has been slashed by six percentage points.

According to Dr Adam Mugume, the director of research at the central bank, “the reduction in CBR has been helpful in containing low inflation and has also translated into reduction in the commercial bank lending rates by 4.7 per cent.”

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