Uganda’s central bank held its benchmark lending rate at 17 percent on Wednesday, saying hikes of 6 percentage points since April had helped slow a rise in core inflation.
“Annual core inflation will peak around 10 percent in the third quarter of 2016, and then gradually decline toward the 5 percent target over the medium term,” Bank of Uganda Governor Emmanuel Tumusiime-Mutebile told a news conference.
Bank of Uganda (BoU) began hiking rates earlier this year after the local currency steeply depreciated against the dollar, pushing inflation higher.
Uganda’s inflation rate rose to 9.1 percent year-on-year in November from 8.8 percent a month earlier. Core inflation – which excludes food, fuel, electricity and metered water – rose to 6.7 percent from 6.3 percent.
Uganda’s central bank watches the core inflation for monetary policy purposes.
The shilling, which is down about 18.5 percent against the dollar, has stabilised in recent weeks.
“Annual core inflation will peak around 10 percent in the third quarter of 2016, and then gradually decline toward the 5 percent target over the medium term,” Tumusiime-Mutebile added.
