The country has maintained the monthly inflation level at around 3.0 per cent, signifies the success of the Monetary Policy Committee (MPC) in controlling the inflation.
National Bureau of Statistics (NBS) said in a latest statement that the annual headline inflation rate for July eased by 10 basis points (bps) to 3.0 per cent from 3.1 recorded in June on lower food and non-food items index.
Orbit Securities' Executive Director, Research, Innovation and Projects Mr Fortius Rutabingwa said the inflation level has been maintained for quite some time which shows the effectiveness of recently adopted monetary policy using policy rate.
"Since January, we've observed a consistent trend of using interest rates as a tool to regulate liquidity.
"The actions of the MPC have played a significant role in this continued tightening of liquidity," said Mr Rutabingwa.
"However, what is crucial for inflation is stability, consistency without frequent changes, which is what we are observing right now."
In July the MPC maintained the central bank rate (CBR) at 6.0 per cent for three months to September.
"MPC decision is supported by successful implementation of monetary policy in the previous two quarters which help to anchor the inflation forecast below the target of 5.0per cent," MPC report shows
The inflation in the last two months has gone down by 0.2 per cent attributed to price decrease for some food and non-food items.
Some food items that contributed to a decrease of the index are including wheat grains by 0.9 per cent and rice by 4.3 per cent.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Others are finger millet grains by 1.7 per cent, maize grains by 2.9 per cent, wheat flour by 0.3 per cent, maize flour by 0.5 per cent, vegetables by 2.4 per cent and fresh cassava by 0.7 per cent.
While some non-food items that contributed to a decrease of the index are including clothing materials by 0.3 per cent, footwear for men by 0.1 per cent, and materials for the maintenance repair of the dwelling by 0.1 per cent.
Others are charcoal by 1.3 per cent, parts for personal transport equipment by 1.4 per cent, petrol by 1.6 per cent and mobile telephone handsets by 0.1 per cent.
ALSO READ: How government tamed inflation
However, Tanzania has the lowest inflation in comparison to Kenya and Uganda.
Nairobi and Kampala experienced inflation increase in July.
In Kenya the inflation slightly decreased from 4.6 per cent in June to 4.3 per cent in July.
Equally, Uganda's inflation increased from 3.9 per cent posted in June to 4.0 per cent last month.
