The reason why the 2% number has been chosen is that this is a level that is neither too high nor too low. We know that inflation which is too high can be detrimental for the economy as it can lead to destabilising feedback loops, for instance, through wage settlements and price indexation, and ultimately erode trust in the currency.
As I come to the end of my remarks, I must stress the need for the nascent Deposit Protection Fund (DPF) of Uganda as an autonomous institution to prove its credibility and fitness for purpose before it gets tested in a period of difficulty.