Uganda Central Bank Holds Key Lending Rate at 9.5%

By Nicholas Bariyo

KAMPALA Uganda-Uganda's central bank held its benchmark lending rate at 9.5% on Tuesday as Africa's top coffee exporting nation contends with rising inflationary pressure.

Inflation rate rose to 2.8% in January, from 2.6% a month earlier, driven in part by higher global commodity prices, Michael Atingi-Ego, deputy governor at the Bank of Uganda, said during a news conference in Kampala.

"Instability in the Middle East is creating new supply chain disruptions, and a threat of higher oil prices" he said.

"The risk of heightened volatility in the global financial and foreign exchange markets could also reverberate in the domestic foreign exchange market"

Uganda, which has kept the interest rate unchanged at 9.5% since August, has also been experiencing above-average rains and flooding associated with the impact of El Nino weather conditions, which are disrupting the transportation of agricultural products to markets.

The country aims to join the league of crude oil producers in 2025, when TotalEnergies and China's CNOOC are set to start pumping up to 230,000 barrels a day of crude from fields along the western border with the Democratic Republic of Congo.

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(END) Dow Jones Newswires

02-06-24 1000ET