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Uganda central bank holds key rate at 9.5%

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Uganda central bank holds key rate at 9.5%

The Bank of Uganda on Dec. 18 decided to keep its central bank rate at 9.5%.

Annual headline inflation slipped to 4.0% in November from 4.8% in October as food crop prices fell. Annual core inflation declined to 3.3% from 3.5%, reflecting the stability of the exchange rate over the past 12 months.

The central bank projects core inflation to pick up to about 5% in fiscal year 2018-2019, with possible upside risks arising from the direction of food crop prices and the exchange rate.

The bank said "domestic economic activity continues to strengthen as financial conditions ease and agricultural output returns to normal." Uganda's economy grew at a rate of 4% for fiscal year 2016-2017, according to revised GDP data from the statistics bureau.

In terms of economic prospects, the central bank estimates GDP growth to rise 5.0% in fiscal year 2017-2018.