Kampala bucks the trend with rates hike

Uganda has become the first major sub-Saharan African economy to increase interest rates this year to counter inflation pressures caused by weakening currency and rising oil prices. A report on the IoL site notes that Central Bank governor Emmanuel Tumusiime-Mutebile confirmed that the Monetary Policy Committee raised the benchmark rate to 10% from 9 % because inflation pressures increased and price growth is projected to exceed its target. ‘A key risk to the inflation outlook is the shilling exchange rate, which remains vulnerable to the possibility of tighter global financial conditions as well as stronger domestic demand,’ Tumusiime-Mutebile said. The weaker currency ‘combined with higher oil prices could result in a more elevated inflation trajectory,’ he said.

Full IoL report