The Bank of Uganda yesterday maintained the Central Bank Rate (CBR) at 7 per cent but warned that inflation could rise further and peak at 6.1 per cent in the first quarter of 2021.
High inflation erodes the purchasing power of currency due to a rise in prices in goods and services in the economy requiring people to have more money to purchase goods/services. It also raises the cost of borrowing money from the banks by companies and individuals. Presenting the monterey policy statement for August, Bank of Uganda governor Emmanuel Tumusiime Mutebile said the Monetary Policy Committee (MPC) is cognisant that its primary mandate is to achieve the medium-term target of (Consumer Price Index (CPI) inflation of 5 per cent.
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