In an effort to strengthen the monetary policy framework, Bank of Uganda (BoU) will be releasing the Central Bank Rate (CBR) on a bi-monthly basis starting with the new fiscal year 2014/15.
In a communication issued to the Daily Monitor, the Governor Bank of Uganda, Prof Emmanuel Tumusiime Mutebile, said: “The monetary policy framework will be held in the middle of the month, on the 10th working day of the month. This is to allow more time for incorporating economic data from the previous month into the analysis which informs the interest rate decision.”
The CBR, which was introduced on the basis of inflation targeting lite (ITL) monetary framework in 2011, is intended to guide the setting of other interest rates in the economy.
This is usually determined primarily on the basis of the BoU’s forecast of future annual core inflation.
Mr Mutebile said over the last 36 months, the CBR has been set at the beginning of each month by the Monetary Policy Committee (MPC) of BoU before the media.
“The less frequent policy adjustments will further support the planning processes of businesses to the benefit of the economy and better align Uganda’s monetary policy framework with those of other East Africa Community partner states,” Mr Mutebile added.
The next meeting of the MPC will be held in August while other MPC and CBR announcements in the new financial year are scheduled for October, December and February, April, June of 2015.
BoU said it will retain the right to adjust its monetary policy stance outside this calendar if circumstances warrant.