Uganda’s central bank holds its benchmark lending rate at 10 percent for the second time in a row, citing subdued inflation, the bank’s governor said on Thursday.
Policymakers raised rates for the first time in three years last October, citing concerns about rising inflationary pressures. They subsequently left them unchanged at their December meeting.
Economic growth was on a steady path, with output slightly ahead of the economy’s potential, Governor Emmanuel Tumusiime-Mutebile told a news conference.
“The inflation outlook in the intermediate period has improved, largely driven by a relatively stronger shilling and a good crop harvest,” he said.
Rising trade protectionism around the world could however hurt demand for Uganda’s exports, he said, adding the damage would however not be enough to dent this year’s growth forecast.
“The economy is projected to grow by about 6.3 percent in fiscal year 2018/19 (July-June) and remain on a steady growth trajectory over the coming years,” Mutebile said.
The growth was partly supported by the bank’s accommodative policy stance and the effects of public infrastructure investments, he said.