What is the CBR, and what does this reduction mean for my business?

The Central Bank Rate is the interest rate at which the Bank of Uganda (BoU) lends money to domestic banks.  Ideally, an increase in the CBR would aim to slowdown demand and reduce inflation, while a decrease in the CBR would be intended to increase demand and boost the overall level of economic activity in the economy.

What you need to know:

  • The COVID-19 pandemic continues to have severe effects on Uganda’s economy. Bank of Uganda’s (BoU)Composite Index of Economic Activitycontracted by 0 percent month-on-month in April 2020, indicatingcontinuous shrinkage ofeconomic activity. The Stanbic Bank Purchasing Managers’ Index (PMI) remainedbelow the 50 mark for the third consecutive month in May 2020, indicating a sustained contraction inindustrial production.
  • While the economic slowdown has been severein the second quarter of 2020, a gradual recovery isexpected to set in during the third and fourth On the whole, household expenditure, investment,exports and imports are projectedto decline in 2020. Accordingly, BoU has revised down its projection ofeconomic growth to arange of 2.5 to 3.5 percent in 2020 from the April 2020 forecast of 3 to 4 percent.

Based on an assessment of the current and evolving macroeconomic situation, BoU has reduced the Central Bank Rate (CBR) by 1 percentage point to 7 percent and expects financial institutions will reduce their lending rates, meaning that the cost of credit will be lower, to encourage businesses to borrow. Reach out to your bank of choice for more information on current lending rates.

Bbanka enkulu eya Uganda emabegako katono yakendeeza ku magoba kw’ewolera zi bbanka endala eziri mu ggwanga (Central Bank Rate). Abaffe CBR kyeki era okugikendeeza kitegeeza ki eri emirimu gyange?

Central Bank Rate (CBR) ge magoba bbanka ya Uganda enkulu (Bank of Uganda) kwewolera zi bbanka endala eziri mu ggwanga. Ssinga amagoba gano gongezebwa, kino kiba kigendererwamu okukendeeza ku muwendo ogutwalibwa wamu n’okuziyiza ensimbi z’eggwanga okunaabuuka. Ku luuyi olulala ssinga gakendeezebwa, ekiba kiruubirirwa kwe kwongera ku muwendo ogutwalibwa okusobola okutumbula emirimu wamu n’ebyenfuna by’eggwanga.

Bye weetaaga okumanya

  • Nnawookeera wa ssennyiga omukambwe akyagendera ddala mu maaso n’okukosa eby’enfuna by’eggwanga. Okusinziira ku bikunganyizibwa bbanka ya Uganda enkulu okupima embeera y’ebyenfuna nga bweyimiridde mu ggwanga buli mwezi, biraga nti eby’enfuna by’eggwanga byakendeera n’ebitundu bina ku buli kikumi (4.0%)mu mwezi gwa Kafuumuulampawu (April) ekiraga okukendeera okw’olugenderezo mu mirimu egivaamu ensimbi.

Nate okusinziira ku Stanbic Bank, ebipimo by’embeera y’eby’obusuubuzi nga bweba eyimiridde ku katale mu by’amakolero wamu n’obuweereza biraga nti byali wansi wa bubonero ataano omwezi ogw’okusatu ogw’omuddiringanwa mu mwezi gwa Muzigo (May) 2020 ekyoleka nti n’ebifulumizibwa mu makolero nabyo byali bikendedde.

 

  • Newankubadde ng’okukendeera mu by’enfuna by’eggwanga kubadde kwa maanyi nnyo mu kitundu eky’ebibiri by’okuna eky’omwaka gwa 2020, waliwo essuubi nti bijja kutereera mu kitundu eky’okusatu wamu n’eky’okuna. Okutwalira awamu, ensaasaanya mu maka, okusiga ensimbi, ebitundibwa ebweru w’eggwanga wamu n’ebyo ebiyingizibwa byonna bisuubirwa okukendeerako mu mwaka gwa 2020.

Okusinziira ku mbeera eyo, Bbanka ya Uganda enkulu yakkakkanyizza ku ssuubi lye yalina ku nkulaakulana mu by’enfuna nga bwe byali birowoozebwa mu kusooka mu mwezi gwa Kafuumuulampawu (April) okuva ku bitundu 3 okutuuka ku 4 ku buli kikumi mu 2020 n’erizza ku bitundu 2.5 okutuuka ku 3.5 ku buli kikumi.

Okusinziira ku mbeera nga bw’eyimiridde mu by’enfuna, Bbanka ya Uganda enkulu yasazeewo okukendeeza ku muwendo kwewolera zi bbanka endala ng’etoolako ekitundu kimu ku buli kikumi (1%) ne bidda ku bitundu musanvu ku buli kikumi (7%)era esuubira nti ebitongole by’eby’enfuna ebirala nabyo bijja kukendeeza ku miwendo gy’okwewola kizzeemu abasuubuzi amaanyi basobole okwewola.

Tuukirira bbanka yo okumanya ebisingawo ku miwendo gy’okwewola nga bwe giyimiridde kaakano.