Bank of Uganda Maintains Central Rate at 10% as Inflation Drops to Single Digit

The Bank of Uganda has maintained the Central Bank Rate (CBR) at 10%.
This was revealed by the Deputy Governor Bank of Uganda, Mr Michael Atingi-Ego, at the release of the Monetary Policy Statement for April 2023.

He noted that the CBR has been maintained at 10%, because the economy has broadly evolved in line with the expectations at the February 2023 MPC meeting.

He noted that the March 2023 data from the Uganda Bureau of Statistics (UBOS) indicates that inflation has dropped.
Annual Headline inflation dropped to 9% in March 2023 from 9.2% in February 2023, and annual core inflation reduced to 7.6% from 7.8 % over the same period.
Similarly, annual Electricity, Fuel and Utilities (EFU) inflation, as well as food crops inflation, dropped during the period.

In the MPC’s current assessment, absent new shocks, inflation will continue decelerating and converge to the 5% target by the end of 2023. However, the inflation outlook is subject to several risks.

The upside risks include; the persistence of high domestic food prices despite the good rains, tighter global financial conditions, and higher oil prices.

Meanwhile, Atingi-Ego revealed that economic growth has remained on a recovery path averaging 6.8 % in the first two quarters of FY 2022/23.

The MPC assesses that the near-term risks to the inflation outlook remain elevated, with considerable uncertainty surrounding the economic outlook.

The MPC further maintained CBR at 10% to contain inflationary pressures sustainably.