The Deputy Governor, Michael Atingi-Ego explained that recent developments in the world have seen inflation rise rapidly and that this is spreading broadly across the basket of consumer goods and services. He said this through a statement on Thursday.
“The weakening of the Uganda Shilling against the US Dollar coupled with rising prices for food and energy have worsened the inflation outlook. Higher business costs are likely to spread into consumer prices thereby pushing inflation higher in the coming months,” Atingi said.
Bank of Uganda, therefore, in a bid to correct this inflation situation, has decided to increase the Central Bank Rate.
This is to deal with the issue of excess liquidity in terms of money in the market and also try to control the skyrocketing prices.
“Accordingly, the Monetary Policy Committee has increased the Central Bank Rate to 7.5 percent,”Atingi said.
Atingi says the rate is going to keep going higher for as long as the inflation is still on. The question is, how does this help a lay man because increasing this rate means borrowing has been made difficult.
This is the reason why opposition is probably always on the streets crying out to government to do something about the situation.
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