According to this approach, monetary policy should be conducted in a “symmetric” manner over the financial cycle. In other words, it should be accommodative at a time of falling asset prices, but restrictive during a financial market boom.
Ensuring a reasonably low level of inflation helps reduce uncertainty in economic decisionmaking so that individuals and investors have a reliable basis for long-range decisions and plans. The Bank’s efforts to keep inflation in check have so far been successful. A continuing commitment to prudent macroeconomic policies builds confidence in Uganda as an investment destination and boosts the country as a whole.