Therefore I want to state clearly that the Bank of Uganda fully endorses the Government’s fiscal stance and absolutely has no problem with fiscal management. Central bank rate As you all know the Central Bank raised its Central Bank Rate (CBR) in September 2013 to 12% to avert the second effects of food prices but also to counter any rise in inflation expectations.
Consequent upon the threat of high inflation being reduced, BoU reduced CBR 11.5 in December 2013 and further to 11 percent in June 2014. The annual core inflation rate has fallen in 2014 but is forecast to edge over 5 percent over the next 12 months due to exchange rate depreciation which has occurred in 2014 and early 2015 due to domestic demand.