By Ronnie Wonder
Bank of Uganda (BoU) is to raise the Central Bank Rate (CBR) by 1 percentage point to 13%, up from 12%, citing upside risks to inflation.
Notably, core inflation rose to 4.8% in May 2015, up from 4.6% in April driven by the pass-through effects of the exchange rate depreciation on the prices of imported goods. Annual headline inflation also rose to 4.9%, up from 3.6% in April.
While releasing the Monetary Policy Statement for June, 2015 at the bank’s offices in Kampala yesterday, Prof. Emmanuel Mutebile, the BoU Governor stressed that aggregate demand has improved though exports of goods and services remain depressed which is a key drag on aggregate demand.
“Indicators of economic activity point to a relatively strong real Gross Domestic Product (GDP) growth in the fourth quarter of 2014/15, supported by faster growth in private sector borrowing and a recovery in the agricultural sector,
