Find visitors' favorite businesstravel Hotels And.... Book your best!

Bank of Uganda postpones key interbank rate announcement

Tuesday July 5, 2011

The Uganda Central Bank on Monday put off announcing its inaugural key rate and inflation target to finalise some technical issues, but said it would release the rate before the end of this week.

The Bank of Uganda (BOU) said last month that it was shifting its monetary policy and would start targeting inflation rather than money supply growth and would launch a central bank interest rate (CBR) on Monday.

The bank has traditionally watched the amount of money in circulation in line with the level of economic activity instead of price stability.

“We intended to hold a press conference today to announce the CBR, but there were still some technical issues we needed to accomplish,” BOU’s director of communications, Elliot Mwebya, said.

“The markets should be attuned, though, because we have the function any day this week.”

Analysts say the shift in monetary policy will offer the Central Bank firmer leverage in regulating inflation which soared for seven straight months from November last year before it edged lower last month.

Uganda’s year-on-year headline inflation fell slightly to 15.8% in June from 16% in May.

Mwebya said monthly adjustments of the CBR by the BOU’s Monetary Policy Committee (MPC) would signal to commercial banks to raise or lower their lending rates to businesses and consumers.

“Through control of commercial banks’ lending rates we’ll be able to influence the amount of credit going to consumers and via that we can manage the level of demand for goods and services and consequently, inflation,” Mwebya said.

An analyst, however, observed that the CBR was on paper expected to work smoothly and allow BOU to control inflation, but in practice some unique complications might arise that will limit its effectiveness in guiding the markets.

“Everyone is waiting but what’s certain is that the markets will take time to absorb the new monetary policy focus and to start using CBR as a real firm benchmark for pricing credit,” said Ronnie Mutebi, treasurer at Bank of Africa.

“There will be other factors to consider in regulating credit flow other than the CBR. Things like risk profiles and liquidity within banks, will also be key,” he pointed out.

The New Vision Newspaper

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Africa Uganda Currency and Forex News .



Haven't yet found what you Want...?

If you haven't yet found what you were looking for or you need detailed information about the subject matter on this page

then...

feel free to ask our business travel consultants.





Book a Prisons & Correctional
Charity Tour


Farmland for Sale
Prime Commercial Property
Entebbe Rd Land 4 Sale
Over 20 Farmland Parcels
Property & Plots of Land

Uganda Online SuperMarket
africaug.com
Online SuperMarket

Uganda Coffee Safari
Book My Coffee Tour

Uganda Honey
Uganda HoneyComb

Subscribe to our Business Travel Newsletter


Enter Your E-mail Address
Enter Your First Name (optional)
Then

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Africa Uganda Business Travel News Digest.

Hotel Booking

Car RentalCar Hire

Africa Uganda Shipping & Handling ServicesShipping & Handling Services


Our Sponsorship Policy


Apple Guavas available
Africa Uganda Plants GuideAfrica Plants Guide

Charity Investment Guide
Changing Lives

Africa Uganda SMS Guide
Africa Bulk SMS

Poultry Investment Guide
Poultry Business Guide

Related Pages



Uganda Hotels Directory

Uganda Hotels Booking Guide


Houses U can buy Uganda Real Estate Guide Industrial/Farmland Deals

Uganda Real Estates Guide


The Mountain Gorilla

Uganda Safari Guide

Uganda Weather Today





Book My Hotel

Please note that all fields followed by an asterisk must be filled in.
YES
NO
YES
NO

Please enter the word that you see below.

  



Uganda Currency

Ex-guide