Uganda central bank holds its key lending rate at 10 per cent

Uganda’s central bank on Monday held its benchmark lending rate at 10 percent for the third time in a row, the bank’s governor said, citing economic activity which is close to potential.

Policy-makers raised rates for the first time in three years last October over concerns about rising inflationary pressures. They subsequently left them unchanged at their December and February meetings.

“The economy is projected to be operating around its potential economic growth of 6-6.5 percent,” Governor Emmanuel Tumusiime-Mutebile told a news conference.

The robust expansion was driven by improved output in the crucial farming sector, higher growth in government consumption and increased private investments, he said.

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But he reiterated concerns about the potential impact of growing trade protectionism around the world, which could dampen demand for Ugandan goods and services at home and abroad.

“Downward risks to the projected economic growth momentum have increased since the previous round of forecasts,” Tumusiime-Mutebiile said.

“The risks largely revolve around unresolved trade tensions which are affecting... investment activities.”

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Central BankUganda