Monetary Policy Statement for June 2024
On 4 June 2024, the Bank of Uganda's Monetary Policy Committee (MPC) maintained the Central Bank Rate (CBR) at 10.25%.
Domestic inflation has risen moderately, lower than previously projected, largely due to the exchange rate stabilising with a bias towards appreciation since March 2024. The relative stability of the Ugandan shilling against the US dollar has benefited from recent CBR increases and inflows from robust coffee exports owing to favourable international coffee prices.
Uganda's inflation remains among the region's lowest with an average of 3.2% in the twelve months to May 2024. Nonetheless, annual headline inflation rose to 3.6% in May 2024 from 3.2% in April 2024, while core inflation increased to 3.7% from 3.5%. The inflation uptick is primarily driven by rising healthcare, education, and transportation service costs, coupled with higher prices for solid and liquid fuels. Services inflation has climbed to 6.2% from 5.4%. Similarly, electricity, fuel and utilities (EFU) inflation has risen to 9.5% from 7.4%, reflecting recent increases in international energy prices and lagged effects of the shilling's past depreciation. However, tight monetary conditions, declining global inflation, and a favourable domestic food supply have partially offset inflationary pressures.
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