In this respect, we can learn a good deal from the experience of countries of more mature market economy. And prompt corrective action (PCA) is a valuable tool. Measures must be available to impose sufficient external pressure on financial institutions whose risk profile and asset quality worsen. These actions also carry the unmistaken messages that poor performance is not welcomed but restricted.
The sound and stable financial sector has in turn enhanced the effectiveness of the conduct of monetary policy by the Bank of Uganda. The Bank has managed to contain inflation to a stable and single digit level.