The central bank of Uganda kept its benchmark lending rate at 10% on Monday, stating that it anticipated inflation would drop to reach its target by the end of the year despite a January uptick that it believed would be transitory.
It was the second time in a row that the Bank of Uganda held its policy rate steady, as deputy governor Michael Atingi-Ego revealed at a press conference. In order to combat inflation, rates were hiked by 350 basis points last year.
Inflation increased to 10.4% in January from 10.2% in December, but Mr. Atingi-Ego predicted core inflation would fall to the five percent objective by the end of 2023.
He noted that the possible impact of global financial circumstances on the value of the Ugandan shilling and rising food and energy costs are risks to the inflation outlook.
According to Mr. Atingi-Ego, "the existing CBR (Central Bank Rate) will accommodate and assist economic recovery while containing domestic demand pressures."
This optimism shown by the Ugandan administration has been consistent of late. Very recently, the president of Uganda noted that his country was in the proper position to turn a massive profit quickly, off of the strength of its newly established drilling project.
President Yoweri Museveni proclaimed that the Ugandan economy would grow by billions, off of the strength of its newly established oil drilling project, estimating that by June 2023, Uganda’s economy will have grown from Ush 162.1 trillion ($45.7 billion) for the financial year ending June 30, 2022, to $48 billion. Read the full story here.
The country’s recently approved Uganda oil pipeline project with a subsidiary of TotalEnergies is valued at $3.5 billion and is expected to contribute substantially to the Ugandan economy, owing to the shortage of fuel across the globe.
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