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UGANDA : Bank of Uganda raises rate to 16%.

The Bank of Uganda has exercised its monetary policy by raising the central Bank rate to 16% in a move to keep inflation within limits.

The Bank of Uganda is urging the government to set up a strict monetary policy that will enable reducing the inflation rate which is currently at 21.4%.

The deputy governor of Bank of Uganda Louise Kasekende stated that the regulations made till now had not sufficiently dealt with the huge inflation.

He believed that if the inflation rates carried on increasing, then the Bank of Uganda would have to carry on raising the central Bank rate by 2% points to 16% in September.

Kasekende stated that the central Bank would increase the ban to for CBR to 4 points and try to keep the seven days inter Bank rates within the ban.

He observed that the rates at which business banks will borrow from the central bank against suitable collateral would be fixed at 22%.

Kasekende stated that this was meant to cut the rise in bank rate which had increased quickly since the past 12 months and to boost more saving and give more backing to the exchange rate.

He stated that the difficulties were international and the authorities would set up more policies to alter the trend.

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Publication:Mena Report
Date:Sep 8, 2011
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