HomeNewsEconomyBank of Uganda Increases CBR to 9% to Combat Galloping Inflation Rate

Bank of Uganda Increases CBR to 9% to Combat Galloping Inflation Rate

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Bank of Uganda has been forced by the rising inflation to increase the Central Bank Rate – CBR from 8.5% – 9% following the Monetary Policy Committee meeting that happened today in the morning.

This is the third time the central bank is increasing the CBR since June this year following inflation that is stimulated by rising food and fuel prices. At the start of June, Bank of Uganda increased CBR from 6.5% to 7.5% revising it in July to 8.5%.

Uganda has not been spared by the inflationary wave that has hit many countries across the world following increase of food and fuel prices attributed mostly to the Russo-Ukrainian war and Aftermath effects of COVID-19 pandemic.

Headline inflation grew from 6.3% in June to 7.9 % in July while core inflation grew from 5.5% in June to 6.8% in July.

According to the Ugandan Bureau of Statistics report at the end of July, Inflation is projected to peak in the second quarter of 2023 before gradually declining to stabilize around the medium term target of 5 percent by mid-2024.

External factors like Geo-political wars that have increased prices of imported goods especially fuel, importunate drought that has resulted into low food production and depreciation of a Ugandan shilling are some of the factors that have been highlighted by Bank of Uganda Deputy Governor Michael Atingi- Ego as factors fueling this inflation.

“The economy continues to face strong cost-push inflation pressures from the external environment, dry weather conditions, and exchange rate depreciation amidst weak domestic demand” Michael Atingi-Ego

Inflation on Food prices increased from 14.5% in June to 16.4 in July while prices of Electricity, Fuel and Utilities grew from 14.2 in June to 17.2% in July.

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