The Bank of Uganda announced that it would commence inflation targeting in the fiscal year through June 2012, with an annual inflation target of 7% during the first 3 years. The Bank also said it would begin using the 7-day repo rate to influence inflation, rather than adjusting money supply. The Bank commented: “We are making a shift from using quantities to inflation targeting,”.
The new initiative will commence in full in July this year, with the bank commencing repurchase operations and announcing interest rates. On the 22nd of June the Bank's rediscount rate was 15.03%, and the bank rate was 16.03% according to the Bank's website. Uganda reported annual headline inflation of 16% in May this year, up from 14.1% in April, while core inflation was 11.3% in May and 9.7% in April.
