The Late BoU Governor Emmanuel Tumusiime-Mutebile

Bank of Uganda (BoU), has maintained the Central Bank Rate (CBR) at 10 per cent in April 2019, this is according to a Monetary Policy Statement issued by Governor Bank of Uganda, Prof. Emmanuel Tumusiime Mutebile.

According to a Monetary Policy Statement the current level of CBR is consistent with the BoU’s policy stance of maintaining inflation around the target of five per cent while supporting Economic growth.

“The economy is projected to be operating around its economic growth of 6-6.5 per cent. The upturn in the Ugandan economy since 2017 is expected to continue,” he said.

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Taking account of the available information, BoU judges that keeping the stance of monetary policy unchanged at this monetary policy committee meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

He said the risks to the outlook include the future direction of food crops prices in the wake of uncertain weather conditions; the strength of domestic aggregate demand and the path of the exchange rate, the latter being contingent on the external economic environment.

“Annual headline and core inflation are now forecast to peak at 6.3 per cent and 6.4 per cent in the third quarter of 2021. Low headline inflation continues to be supported by low food crops inflation which declined to minus 9.9 per cent on March 2019 from minus 4.4 per cent in February 2019. Energy Fuel and Utilities inflation also declined from 5.9 per cent to 5.3 per
cent over the same period,” he said.

The annual headline inflation remained unchanged at 3.0 percent as in February 2019 while annual core inflation rose from 3.7 per cent to 4.6 percent approaching the BoU’s medium term policy target of 5 per cent

Mutebile said, elevated political and policy uncertainty in the global economy in an environment of limited political space could weigh further on global growth and subsequently on Uganda’s economic growth.

“Downward risks to the projected economic growth momentum have increased since the previous round of forecasts. The risks largely revolve around unresolved trade tensions, which are affecting global and domestic trade and investment activities,” he said.

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