Update: The Bank of Uganda’s monetary policy committee will meet on Monday, 6 April, according to an email sent by its head of media relations, Sylvia Juuko, on Saturday. In line with measures to prevent the spread of the coronavirus, the usual press briefing held to explain the bank’s policy decision will not be held.
The Bank of Uganda has called off its monetary policy committee meeting which was scheduled for Friday and said it will communicate a new date “soon”.
The central bank did not give a reason for the decision, which was posted on social media (and, later, on its’ website). It had earlier communicated that the governor, Emmanuel Tumusiime-Mutebile, is sick and was receiving treatment “in a Ugandan medical facility”.
“BoU governor Prof. Mutebile took sick leave on Wednesday, March 25, 2020,” the bank said in a statement posted on social media on Wednesday. “He is receiving treatment in a Ugandan medical facility and will resume duty as soon as he has recuperated. Strongly disregard the false and malicious story of his passing.”
The statement was signed by Adam Mugume, the bank’s executive director for research.
The monetary policy committee meets once every two months to set the bank’s policy interest rate, the central bank rate. Its last meeting was in February when the bank held interest rates steady, with the CBR at 9%.
But many of the assumptions behind the Bank of Uganda’s February decision have been upended by the global spread of the Covid-19 coronavirus outbreak, including to Uganda. The government has since lowered its forecast for economic growth in 2019/2020 from 6% to 5.7% due to the disruptions caused by the outbreak.
In addition, the central bank also announced that it is ready to intervene in the foreign exchange market to “smoothen out excess volatility arising from the global financial markets.”
The latest figures from the Uganda Bureau of Statistics show that inflation is running below the bank’s medium term target of 5%. This, combined with the ‘already visible’ slowdown in economic activity gives the central bank considerable latitude to lower interest rates when it next meets.
On Thursday, BoU said the press conference that follows the monetary policy committee would be held online through a Facebook Live stream, not at the bank as is custom. This is “due to the evolving situation regarding the coronavirus (Covid-19) and the safety guidelines issued by the ministry of health”.
*Updated on 5 April to add new meeting date.