BANK OF UGANDA SHOULD NOT DONATE OUR RESERVES TO SPECULATORS Appearing on #UBCBehindTheHeadlines last night PSST @rggoobi commended @BOU_Official for the monetary policy measures being implemented to stabilize the shilling and manage inflation without depleting the reserves. Dr. Ggoobi said the economic fundamentals are in good place despite the depreciation of the shilling caused mainly by external factors, including the war in the middle east which has led to increase in oil prices globally. He said a barrel now costs about USD 100 and as a result the pump price has gone up and so are the transport costs, adding that increase in freight and insurance costs has led to increase in prices of imports. The PSST said the recent revision of the US policy rate upwards by 25 basis points caused the portfolio investors to speculate and rush to purchase US papers leading to depreciation of the shilling. He also noted that tourism receipts were affected by Ebola threat especially during the last quarter, adding that commodity prices of exports such as coffee and cocoa have been affected, leading to reduced inflow of the dollar and relative increase in the price of dollar. Ggoobi reiterated that the economy is growing steadily, noting that the International Monetary Fund (IMF) projects Uganda to be the fastest growing economy in region in 2027 at 9.9%, slightly below the double digit due to exogenous factors as stated above. He said Bank of Uganda has moved decisively to arrest inflation now at 4.6% but within target. “We have to coordinate the fiscal policy and monetary policy. Government has responded to the contractionary monetary policy by releasing less money in quarter two than what Government wanted by cutting expenditure by almost 3 trillion shillings” said the PSST. He said Government is implementing the Tenfold Growth Strategy and the focus is growth driven by exports, adding that export promotion, import substitution, value addition and infrastructure development are high on agenda. Dr. Ggoobi said the priorities of Government include; the construction of the standard gauge railway (SGR) to reduce freight costs, electricity by constructing a new dam (Ayago) and transmitting electricity to growth centres, irritation to stabilize agriculture, industrial parks infrastructure and PDM to integrate more Ugandans into production adding that this has helped in arresting inflation. @ubctvuganda #TenfoldGrowth #ATMS #DoingMore