December 18, 2017 / 9:58 AM / a year ago

Uganda central bank holds key lending rate at 9.5 percent

KAMPALA (Reuters) - Uganda’s central bank held its key lending rate at 9.5 percent on Monday, saying earlier policy easing actions had improved economic conditions.

Bank of Uganda deputy governor Louis Kasekende said inflation remained subdued - it slowed to 4 percent year-on-year in November - but said risks might come from higher food prices.

“Domestic economic activity continues to strengthen as financial conditions ease and agricultural output returns to normal,” said Kasekende.

He said the economy would expand at 5 percent in the fiscal year 2017/18, which started in July.

In October, the central bank cut the rate to 9.5 percent, lowering it below the psychologically important threshold of 10 percent for the first time since the bank introduced its inflation-targeting monetary policy in 2011.[L8N1ME1ZY]

Reporting by Elias Biryabarema; Editing by Maggie Fick and Andrew Heavens

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