By Our Reporter
Bank of Uganda (BOU) has held the Central Bank Rate (CBR) at 17% citing inflation forecast and accompanying risks. BOU believes this monetary policy stance will curb the rise in core inflation over the next two to three quarters and then gradually bring it back to the target of 5% over the medium term.
In a statement read at a press conference at BOU headquarters in Kampala today, the bank’s governor professor Emmanuel Mutebile said, “Since the previous meeting of the Monetary Policy Committee, the inflation outlook has improved slightly mainly due to the exchange rate and food price developments. Annual headline and core inflation declined to 7.6% and 7.1%, respectively in January 2016 while food crop inflation declined from 16% to 12.3%. A fall in food crop prices, by 4.7 percentage points in the same period contributed to the reduction in headline inflation.