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Uganda’s central bank maintained its key policy rate for a fifth consecutive time as consumer-price growth slowed to the lowest level this year.

The Monetary Policy Committee held the rate at 10%, Governor Emmanuel Tumusiime-Mutebile told reporters Thursday in the capital, Kampala.

“The evaluation of the macroeconomic developments based on the current information set and outlook suggest that at the current central bank rate, monetary policy stance is accommodative and that the inflation will converge to the target in the medium term while supporting growth,” he said.

While its medium-term inflation outlook remains unchanged, the central bank expects higher inflation in the next 12 months, Tumusiime-Mutebile said.

Key Insights:

  • Other central banks in the region, including South Africa and Namibia, have eased policy rates recently to help boost their economies. The Bank of Uganda sees expansion of as much as 6.3% in the 12 months through June, with growth averaging 6.2% in the next two years, which means it can use monetary policy to attract inflows.
  • The central bank forecasts inflation at 5% over the next two to three years.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura, Rene Vollgraaff

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