The Deputy Governor of Bank of Uganda Micheal Atingi Ego said the Central Bank Rate has dropped to 9.5%.

Atingi Ego who was speaking during the reading of the Monetary Policy Statement for August 2023 attributed the decrease to tighter monetary and fiscal policies together with strengthening of the shilling exchange rate.

While the economic conditions seem to be unforgivingly hard for business performance, the central bank says that inflation is expected to continue decelerating due to factors like the improved low energy prices in the country.

According to the deputy governor Bank of Uganda Micheal Atingi Ego, the decline was due to the tighter monetary and fiscal policies together with improved global supply chains and reduced domestic demand.

"The decline was due to the improved low energy prices, tighter monetary and fiscal policies and inflation is expected to continue decelerating in the country overtime" Atingi Ego said.

Atingi Ego says advanced economies will likely maintain tight monetary policies which might cause currency volatility as foreign investors in the local market seek high returns abroad.

"However advanced economies will likely to maintain tight monetary policies which might cause currency volatility as foreign investors in local markets seek high returns abroad, nevertheless, the exchange rate is expected to remain stable" Atingi Ego said

Uganda's economy has demonstrated resilience and has been recovering well despite the uneven global growth environment, however the Bank of Uganda closely monitors economic development and inflation prospects to take appropriate actions for sustainable microeconomic stability.