By Silvia Nyambura
Bank of Uganda (BOU) has cut the Central Bank Rate (CBR) by 1 percentage point to 14%. This may or may not have an effect on commercial banks’ lending rates which currently stand at between 22% and 25%. According to BOU governor Emmanuel Mutebile, Uganda is a free market economy and therefore the central bank cannot pressurize banks to reduce interest rates.
Releasing the monetary policy for the 2 month period ending August at the bank’s headquarters in Kampala this afternoon, Mutebile said, “We hope that with the lowering of CBR, banks will look at the signals and lower interest rates.
