Uganda’s Central Bank has cut its key lending rate by another 100 basis points, bringing the policy rate down to 14%.
This is its third rate cut since April. Governor Emmanuel Tumusiime-Mutebile said inflation is set to stabilize in the next six months, giving the Central Bank room to continue increasing money supply. The rate cut should help support a recovery of private sector credit and support real economic growth.
The Bank of Uganda expects GDP growth to accelerate to 5.5% in the fiscal year ending June 2017 while inflation will likely drop to around 5% by the end of 2016.