Business

Bank of Uganda cuts lending rate

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By Martin Luther Oketch

Posted  Wednesday, December 4  2013 at  00:00
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Bank of Uganda has announced that it is continuing with its accommodative monetary policy stance by reducing the Central Bank Rate to 11.5 per cent for the month of December from 12 per cent.

Briefing the press yesterday on the Central Bank Rate for the month of December, the Deputy Governor Bank of Uganda, Dr Louis Kasekende, said this is aimed at encouraging increased private investment in the economy.

Mr Kasekende said: “Real economic activity to show ed signs of recovery, part ly boosted by the accommodative monetary policy stance and public investment.”

Bank of Uganda explains that the accommodative monetary policy stance is also meant to lift Uganda’s economic growth, which has continued to be below the growth potential.

“Going forward, the growth will benefit from the private consumption, which is projected to rise as consumer and household credit extension gradually gain momentum,” Mr Kasekende.

Uganda’s GDP growth rate in 2013/14 is being projected at 6.2 per cent up from 5.8 per cent in 2012/13, and projected to pick up more speed in financial year 2014/15 to 6.5 per cent.

However, Mr Kasekende said economic growth remains below potential, with downside risks due to the uncertainties in the global economic environment.

The executive director of research, Dr Adam Mugume, said the outlook for Uganda’s economic growth is bright, and is being supported by increased foreign direct investment in the country mainly in the oil sector.

moketch@ug.nationmedia.com