Bloomberg News

Uganda Holds Benchmark Rate for Fourth Month to Curb Inflation

April 03, 2013

Uganda’s central bank left its benchmark interest rate unchanged for a fourth time this year to ward off inflation pressures.

The Bank of Uganda kept its policy rate at 12 percent, Governor Emmanuel Tumusiime-Mutebile told reporters today in Kampala, the capital. That was in line with the forecasts of two of three economists surveyed by Bloomberg, with one predicting a cut.

“The central bank is under pressure to rein in inflation,” Robert Katabaire, an researcher at Kampala-based Dyer & Blair Uganda Ltd., said by phone before the decision was announced.

The inflation rate climbed for the first time in three months to 4 percent in March from a revised 3.5 percent in February after some food and fuel prices rose.

The bank has kept interest rates at a record low since December to help stimulate economic growth, which is forecast at 4.3 percent in the fiscal year through June from 3.2 percent in 2011-2012, marking the slowest pace in 25 years.

The shilling has gained 3.2 percent against the dollar this year, the third best-performing currency in sub-Saharan Africa, according to data compiled by Bloomberg.

To contact the reporter on this story: Fred Ojambo in Kampala at  fojambo@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson in Nairobi at pmrichardson@bloomberg.net.


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