RISING LENDING RATES: Gov’t still crowding out businesses
The central bank admits that while there has been a minimal fall in lending rates, helped by the lender’s policy interventions, the persistent rise in interest rates is a result of structural issues, according to Adam Mugume the Director of Research & Policy at Bank of Uganda. According to the central bank's recent records, weighted average Shilling and foreign currency lending rates rose in the three months to June 2024 compared to the three months to March 2024, following a series of tightening cycles conducted by the Bank of Uganda’s Monetary Policy Committee (MPC). The average UGX lending rate rose to 18.1% in the three months to June 2024 from 17.6% observed in the three months to March 2024. Similarly, the lending rate on foreign currency-denominated loans rose to 9.1% from 8.9 % over the same period.
