Thursday, June 15, 2017

Uganda postpones policy decision until June 19

     Uganda's central bank has postponed its June press briefing and monetary policy statement scheduled for Thursday, June 15 to Monday, June 19 "due to unavoidable circumstances," the bank said.
      The Bank of Uganda (BOU) has cut its Central Bank Rate (CBR) by 100 basis points this year and by 600 points since embarking on an easing cycle in April 2016.
      Analysts had expected the BOU to continue easing its policy stance despite rising inflation to help stimulate economic growth.
      Uganda's headline inflation rate rose to 7.2 percent in May from 6.8 percent in April due to rising food prices from prolonged drought that is curtailing harvests.
     Core inflation, which excludes food, fuel, metered water and electricity, rose to 5.1 percent in May from 4.9 percent in April.
      At its last meeting in April, when the BOU cut the CBR by 50 basis points to the current 11.0 percent, said the stable exchange rate of the shilling and subdued domestic demand had helped dampen inflationary pressure, adding the near-term outlook for inflation had improved.
      The BOU forecast core inflation of around 5 percent in a year.
      Uganda's shilling has appreciated since early May after trading mostly sideways since November last year. Today the shilling was trading around 3,588 to the U.S. dollar, up 0.4 percent this year.
       In April the BOU also said its forecasts for economic growth in the current 2016/17 year, which ends June 30, of 4.5 percent was unlikely to be achieved.
       In February the BOU lowered its 2016/2017 growth forecast to 4.5 percent from 5 percent.
       Uganda's Gross Domestic Product grew by an annual rate of 1.4 percent in the fourth calendar quarter of 2016 - the second quarter of 2016/17 - for the lowest growth rate in four years and down from 2.0 percent in the first 2016/17 quarter.



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