Uganda Business News: Central Bank reduced lending rate

Ultimate Media

After reports of reduced inflation, the Bank of Uganda has reduced the Central Bank Rate by 1 percent this month

The central bank rate which has been at 23 percent over the past two months is now at 22 percent.

The governor bank of Uganda Prof Emmanuel TumusiimeMutebire attributes the reduction in the central bank rate to the continuous reduction in the inflation rate and appreciation of the Uganda shilling against major foreign currencies.

The country’s inflation rate dropped to 25% this month from 27% in December last year.

Mutebire maintains that inflation will be brought to a single digit figure by the end of 2012.

The increase in the Central Bank rate saw banks increase interest rates on both old and new loans, leading to a public outcry especially from traders who even went on strike over the same.