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IMF Boss Commends Bank of Uganda's Monetary Policy
he outgoing International Monetary Fund (IMF) senior resident representative to Uganda, Thomas J. Richardson has commended bank of Uganda's monetary policy for bringing down the East Africa's third largest economy's year-on-year inflation to 18.5% from 30.4% in October last year.
Richardson made the remarks while addressing a press briefing at Bank of Uganda's head office on June 20. "BOU's policy has been aggressively attempting to deal with the high inflation," he said. "Well it could have affected private sector growth but the fact is inflation is coming down."
BOU currently uses the central bank rate to influence lending behaviour by commercial banks. It raised the CBR from 13% in July last year to 23% in early 2012 before it started reducing it in February. The Bank set the rate at 20% in June from 21% a month earlier.
The IMF boss however said that the fiscal policy should support monetary policy if inflation is to be contained. He urged government to increase revenue to GDP ratio from the current 13%, invest more in the agriculture sector that emplyes over 75% of the total population, invest more in infrastructure, among others. Official figures from the Uganda Bureau of Statistics indicate that Uganda's economy has been growing at 3.2% in the fiscal year that ends on June 30, from 6.7% expansion in the year earlier.
By Julius Businge
The Independent Newspaper
20 June 2012
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