BoU Maintains Central Bank Rate At 12 Percent

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Bank of Uganda (BoU) has maintained the Central Bank Rate (CBR) at 12 percent for the month of October, 2013.

Addressing the press on Wednesday, the BoU Governor, Emmanuel Tumusiime-Mutebile said: “I believe it is warranted to maintain a neutral monetary policy stance for this month, therefore the CBR will be maintained at 12 percent.”

Mutebile said the bank’s policy priority is to ensure annual core inflation is brought back down to 5 percent over the medium term.

“If there is any increase in the medium term forecast for core inflation in the months ahead, the BoU will raise the CBR.”

Meanwhile, the Annual core inflation is forecasted to be in the range of 7 to 8 percent over the next few months before declining to 5 percent in subsequent months.

The Annual Headline Inflation rate for September 2013 rose to 8.0 percent from the 7.3 percent registered for August 2013.

In a press briefing on Monday, the Uganda Bureau of Statistics said the high level of food prices increased the inflation rates in the Country.

While releasing the Monetary Policy Statement for October, Mutebile also noted that the rise was driven largely by higher food crop prices because of drought. “The increase in food prices is temporary and should start to abate at the end of 2013 or beginning of 2014,” he added.

He also noted that the inflation resulting from domestic food prices affects imports and exports .

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