Bank of Uganda maintains the benchmark lending Rate at 6.5%

The meeting of the Bank of Uganda Monetary Policy Committee has maintained the Central Bank Rate (CBR) at a record 6.5%.

The central bank has held its bench mark lending rate at all time low to help in business recovery after an economic slowdown caused by COVID-19.

“The Bank of Uganda (BoU), at the Monetary Policy Committee (MPC) meeting of October 2021, has decided to maintain the Central Bank Rate (CBR) at 6.5 percent” revealed the Bank of Uganda in a statement.

The economy of Uganda contracted by 1.1% in the previous year but is expected to grow by 3.5-3.8% in this year a lower projection compared to August’s projection.

Prof. Emmanuel Tumusiime Mutebile the governor Bank of Uganda attributed to a slowdown in the recovery rate to the second wave of COVID-19 which started in May 2021 forcing the country to go into a lock down again in June 2021.

The second wave of the Covid-19 pandemic interrupted the recovery of the economy and real GDP growth momentum is expected to have declined in the Sept 2021 quarter as a result of the COVID-related restrictions,” said Mutebile in a statement.

Prof. Mutebile is positive to achieve a 5.5-6.0% economy growth rate in the 2022/2023 financial year peaking at 6.5-7.5% in the next half of the financial year.

Inflation rate has however remained unchanged at 2.2% attributed to decline in prices of services inasmuch as the price of goods saw a general increase.

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