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Uganda central bank holds key lending rate at 9.0 pc

"The BoU assesses that the current stance of the monetary policy is appropriate given the forecast inflation trajectory and the currency state of the economy," the governor said.


Reuters 12 Jun 2018, 10:27 AM Uganda
  • The Ugandan shilling has been depreciating sharply over the last several weeks and on Friday the central bank injected dollars into foreign exchange markets in a bid to halt the losses. (Image Credit: Twitter)

Uganda's central bank held its key lending rate at 9.0 percent on Tuesday and said there was a possibility of inflation rising, forecasting higher economic growth for 2018/19 (July-June) compared with the previous year.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile told a news conference the economy was forecast to expand 6 percent in 2018/19, from a projected 5.8 percent in 2017/18 and 3.8 percent in 2016/17.

"The BoU assesses that the current stance of the monetary policy is appropriate given the forecast inflation trajectory and the currency state of the economy," the governor said.

Inflation edged down slightly to 1.7 percent last month from 1.8 percent in April.

The Ugandan shilling has been depreciating sharply over the last several weeks and on Friday the central bank injected dollars into foreign exchange markets in a bid to halt the losses.

At 1015 GMT on Tuesday it traded at 3,830/3,840 to the dollar, weaker than 3,810/3,820 on Monday. Some traders have blamed strong demand from fuel importers and manufacturers for the depreciation.

"Downside risks to the macroeconomy include the exchange rate depreciation coupled with increasing oil prices," Tumusiime-Mutebile said.

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