BOU keeps lending rate unchanged at 6.5%

By Ritah Kemigisa

The Bank of Uganda’s monetary policy committee of April has for the fifth consecutive time maintained the lending rate at 6.5%.

This comes despite the rising inflation with the annual headline and core inflation forecast to average 5.2% and 4.7% from what had been projected in February.

However, the deputy governor of the central bank Michael Atingi-Ego in a statement says 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.

According to Atingi, prices of some goods have fallen which shows that inflation expectations have been contained.

He meanwhile says the economy continues to recover from the covid19 with the economy expected to grow in the range of 5.5% to 6% from the 6% earlier projected.

He meanwhile expresses fear that the spike in global geopolitical tensions and supply chain disruptions will hinder the stability and growth of the economy.

Written by Noelyn Nassuuna