KAMPALA (Reuters) -Uganda’s central bank held its benchmark rate at 6.5% on Monday, as authorities in the East African country looked to strengthen growth prospects after all outstanding anti-coronavirus measures were lifted last month.
Policymakers have left the rate unchanged since June, when they cut it from 7%. In December, they said there were still lingering risks to growth, even as the momentum of economic activity started to return to normal.
The economy expanded by 6.5-7% last year after a 1.5% contraction in 2020, the central bank said in a statement.
It is projected to expand by 6% this year “as domestic demand recovery broadens”, the central bank said.
Slower global growth, continued supply chain disruptions and tighter global monetary and financing conditions continued to pose a threat to the country’s growth outlook, the bank warned.
“Economic recovery continues to require monetary policy support,” it said in a statement.
Uganda had imposed one of the world’s most sweeping and stringent anti-coronavirus measures, some of which remained in place for nearly two years. Last month, authorities lifted all of them and fully re-opened the economy.
“Domestic demand is making a strong comeback as COVID-19- related restrictions are eased, adding to the gains from robust external demand,” the central bank said.
(Reporting by Elias BiryabaremaEditing by Gareth Jones and Bernadette Baum)
