Uganda's Central Bank on Monday revealed it was maintaining the key lending rate despite downward changes in the market trends, saying the current rate is neutral enough to support the country’s high economic growth as well as low commercial lending rates.
The current Central bank Rate (CBR) is at 12 per cent.
Addressing a news conference on Monday, Central Bank Governor Mr. Emmanuel Tumusiime Mutebile said the Economy was regaining steadily and that borrowing was picking up as lending rates offered by commercial banks dropped lower.
“Commercial banks’ shilling denominated credit to the private has increased for the fourth successive month indicating that bank lending is gaining momentum. Average bank lending rates for shilling denominated loans declined to 22.5 per cent in September 2013 from 23.1 per cent in the previous month, a reduction which should support further growth in bank lending,”Mutebile noted.
Mutebile also stressed that the economy's real growth is close to the economy’s long term potential of 6-7 per cent growth.
“The buoyancy of domestic demand may constrain the rate at which core inflation will fall back in the medium term. Our forecast for annual core inflation is that it will be in the range of 6.5 per cent to 7.5 per cent in 12 months’ time and that will fall back towards 5 per cent in 2015,”noted Mutebile.
The current Central bank Rate (CBR) is at 12 per cent.
 |
| Central Bank Governor Emmanuel Tumusiime Mutebile. |
Addressing a news conference on Monday, Central Bank Governor Mr. Emmanuel Tumusiime Mutebile said the Economy was regaining steadily and that borrowing was picking up as lending rates offered by commercial banks dropped lower.
“Commercial banks’ shilling denominated credit to the private has increased for the fourth successive month indicating that bank lending is gaining momentum. Average bank lending rates for shilling denominated loans declined to 22.5 per cent in September 2013 from 23.1 per cent in the previous month, a reduction which should support further growth in bank lending,”Mutebile noted.
Mutebile also stressed that the economy's real growth is close to the economy’s long term potential of 6-7 per cent growth.
“The buoyancy of domestic demand may constrain the rate at which core inflation will fall back in the medium term. Our forecast for annual core inflation is that it will be in the range of 6.5 per cent to 7.5 per cent in 12 months’ time and that will fall back towards 5 per cent in 2015,”noted Mutebile.