Bank of Uganda Reduces Central Bank Rate to 15%

Posted: 2016-06-13T11:00:59Z
Bank of Uganda Reduces Central Bank Rate to 15%

Bank of Uganda has reduced the central bank rate by 1 percentage point to 15% effective today.

This was announced by the governor Bank of Uganda Emmanuel Mutabire this afternoon, while reading the June 2016 policy statement.

Core inflation is forecast to fall back to policy target of 5% over the next 12months; Bank of Uganda believes there's scope to continue easing.

According to Mutebire, both annual headline and core inflation are forecast to stabilize around the medium term target of 5% by early 2017.

He explains that BOU has reduced the CBR in order to have an impact on the state of the economy.

Dr. Adam Mugume, the executive director research and function at Bank f Uganda says with the reduction in CBR, it means liquidity is cheaper and this will trigger a reduction in interest rates.

A central bank rate is the interest rate at which the central bank lends money to domestic banks.