Uganda cut its key lending rate for the first time in six months yesterday, with the central bank citing easing inflationary pressures, weaker-than-thought household consumption and a stronger-than-expected local currency.
Governor Emmanuel Tumusiime-Mutebile said the Bank’s Monetary Policy Committee was cutting the Central Bank Rate by 100 basis points to 11 per cent.
This, he said, should be a signal to commercial banks to cut their rates. “Given the improvement in the inflation forecast and the need to further stimulate domestic demand to support the economy in 2013/14, the Bank of Uganda will reduce the CBR by one percentage point to 11 percent,” Tumusiime-Mutebile told reporters.
“Private sector credit remains constrained by both the high bank lending rates and structural factors.”
—Reuters
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