The Bank of Uganda (BOU) has maintained its benchmark lending rate at 9.5% for the fourth consecutive month, citing low inflation and a stable economic outlook.
The Monetary Policy Committee (MPC) announced the rates on Tuesday, saying that the core inflation rate, which excludes food and energy prices, was 3.3% in January 2024, below the central bank’s target of 5%.
MPC said that the economy was recovering from the shocks of the COVID-19 pandemic and the locust invasion, and projected a growth rate of 6.5% in the fiscal year 2023/24, up from 5.3% in the previous year.
The committee also said the recovery was supported by higher growth in East Africa and China, lower inflation, and increased public and private investment, especially in the oil sector.
However, the MPC also warned of some downside risks to the outlook, such as the uncertainty over the global financial conditions, the volatility of the exchange rate, and the impact of climate change on agriculture.
BOU said it would continue to monitor the economic and financial developments and adjust its policy stance accordingly to achieve its inflation and growth objectives.