Bankers association welcomes decision to maintain lending rate
By Ritah Kemigisa
The Uganda Bankers Association has welcomed the central bank’s decision to maintain the lending rate at 6.5%.
The bank in its monetary policy statement for April released on Tuesday maintained the Central Bank Rate at 6.5% for a fifth time despite the rising inflation.
The annual headline and core inflation is forecast to average 5.2% and 4.7% from what had been projected in February.
The Bank first cut the lending to the historic low of 6.5% to try and boost the flow of cheap credit and lift businesses battered by the effects of the COVID-19 pandemic.
Speaking to KFM, Bankers association executive director Wilbrod Owor says the reasons for keeping the lending rate low are valid underscoring the need to grow the private sector.
In the monetary policy statement, Bank of Uganda Deputy governor Michael Atingi-Ego said they maintained the lending rate because much as the inflation is forecast slightly above the 5% target in the medium term, the recent price hikes have not spread across the basket of consumer goods and services.
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