By Samuel Sanya Year-on-year core inflation, the main determinant of the benchmark Central Bank Rate (CBR), has declined to 5.7% from 7% at the end of December, raising hopes of a further drop in rates in January. Core inflation is only 0.7% points off the Bank of Uganda target. The CBR was reduced from 12% to 11.5% in December and bankers are hoping for a second successive reduction in January. "I think the inflation trend clearly favours additional policy easing next month," Faisal Bukenya , the head of market making at Barclays Bank , told the media recently. Average commercial bank lending rates have dropped to 22.6% from 25%, and experts say the continued reduction in the cost of funds in the economy will bring down lending rates to rates below 20%. Annual headline inflation, the overall inflation measure, declined to 6.7% from 6.8% due to high food supplies to markets in the first two weeks of December. Prices of vegetables, transportation, milk, meals in restaurants and clothing went up by average 3.38% during the Christmas season. The average annual inflation rate for 2013 was 5.5% lower than the 14% average last year, a clear indication that the economy is making a steady recovery. Uganda's economy is projected to grow by 6.5% this financial year up from 5.8% last year. COPYRIGHT
Most Popular Stories
- Koch Brothers Step up Anti-Obamacare Campaign
- FDIC Sues Big Banks Over Rate Manipulation
- Stocks Close Lower Ahead of Crimea Vote
- FDIC Accuses Big Banks of Fraud, Conspiracy
- Jittery Investors Dumping Russian Stocks
- U.S. Consumer Sentiment Falls in Early March
- Is Malaysian Airlines Flight 370 in Andaman Sea?
- Ulta Shares Look Good on Strong Q4
- Vybz Kartel Convicted of Murder
- JLo Turns the Tables in New Vid: 'I Luh Ya Papi'