BOU Predicts High Inflation Due To El Nino Rains

The Bank of Uganda has predicted heightened inflationary tendencies in the coming months.
Releasing the Monetary Policy Statement for October 2015, the Central Bank governor Prof Emmanuel Tumusiime Mutebile said this projection is hinged on the weak global demand conditions, exchange rate depreciation and the anticipated El Nino rains.
He explained that given the current condition, food and other commodity prices are likely to shoot up.
Meanwhile, the BOU has raised the Central Bank Rate by 1% to 17%.
According to the monetary statement, the move was prompted by the rise in annual headline inflation edging to 7.4% from 4.8% in August.
Annual core inflation also rose to 6.7% in September 2015 from 5.5% in August 2015
The heightened inflationary pressures were driven by the rise in food crop prices, in combination with the effects
The governor says that although real GDP growth in the Financial Year 2015/16 is projected at 5% down from an earlier projection of 5.8%, this is still strong growth given the weakening if global economic growth.

Story By Samuel Ssebuliba