Uganda Central bank rate set at 13%

By Samuel Sanya

The Governor Bank of Uganda Emmanuel Tumusiime Mutebile has announced a 13% Central bank rate for July, the first in a series of monthly rates aimed at clamping down inflation through adjusting the cost of borrowing.

Commercial banks will have to pay the 13% interest up from 11% on money borrowed from the central bank and in turn transfer the burden to their loan clients thereby making borrowing more expensive during the month of July.

“To tighten monetary policy, the Central Bank Rate will be set at 13% for the month of July. The interest rate will be used to guide the 7–day interbank interest rates,” the governor said while addressing reporters at the Central Bank.

The 7-day interbank rate is the rate of interest one bank charges another for money borrowed for a week.