Bank Of Uganda Increases The Central Bank Rate (CBR)

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 By Caroline Namanda

The Bank of Uganda has raised the CBR by 1% to 17% in October 2015 from 16% in September 2015. The Monetary policy actions taken by Bank Of Uganda (BOU) since April 2015 has entailed a rise in the CBR by 5% points, have already dampened inflationary pressures and reduced the risks to high inflation.

In the Monetary Policy Statement delivered by the Governor of the Central Bank Prof. Emmanuel Tumusiime – Mutebile, inflation rose in September; headline from 4.8% in August to 7.2% and Core from 5.5% in August to 6.7% mainly due to rise in food crop prices combined with the effects of exchange rate depreciation.

The re discount rate and the Bank rate were increased to 21% and 22% respectively. The exchange rate is expected to remain relatively stable.