Bank of Uganda(BOU) has reduced the commercial bank benchmark lending rate from 12% in May to 11% for June ,2013.
While revealing this Month’s CBR at central bank villas in Kampala, Governor bank of Uganda Prof. Emmanuel Mutebile explained that there is great anticipation inflation will drop more and this shall fuel economic growth of 7% per annum.
Mutebile explained that the recovery output and input in this financial year (2012/2013) is driven by net export demand and to a lesser extent investment demand. Adding that in 2013/2014, its unlikely that the net export demand will continue to provide the primary source of growth for the economy and consequently, the domestic demand will have to make a larger contribution to the growth in investment, from both public and private sectors.
He further added that the forecast for bank of Uganda for core inflation over the next 12 months has improved in two respects and now forecasting slightly lower inflation rates in the shorter term.