Press "Enter" to skip to content

Uganda’s central bank may cap commercial bank interest rates

South Sudan NEWS PORTAL (JUBA CITY)

Uganda’s central Bank (BoU) has threatened to cap the interest that commercial banks can charge borrowers, after the industry failed to reduce loan rates in response to cuts in benchmark rates, according to a letter from its governor.

The BoU cut its Central Bank Rate by 200 basis points to an all-time low of 7% between April and June, to try to help jumpstart an economy battered by the impact of the coronavirus.

Its governor Emmanuel Tumusiime-Mutebile said in the letter, – dated July 7, sent to all commercial banks and seen by Reuters – that he was “disheartened” to see they had not acknowledged that reduction with cuts of their own.

S.Sudan NEWS PORTAL:  Senior politician calls on leaders to change mindset

The central bank was therefore considering invoking a law that allows it to determine maximum and minimum rates that “financial institutions may…impose on credit extended in any form.”

Kenya capped lending rates for its commercial banks on similar grounds in 2016, but scrapped the policy last November after it was blamed for stalling lending to businesses.

Tumusiime-Mutebile said in the letter that weighted average lending rate on loans rose to 18.8% in May from 17.7% in April, at a time when economic activity in Uganda was facing an unprecedented decline due lower demand, lower capital inflows, reduced productivity and mass unemployment

S.Sudan NEWS PORTAL:  First ever women’s football league kicks off

If implemented, the cap would significantly hit revenues at commercial banks, whose leading local players include affiliates of Standard Chartered Bank and South Africa’s Standard Bank.

The World Bank projects growth in Uganda’s economy could slow 0.4% this year from 5.6% in 2019 due to the effects of the pandemic.

Continue reading at Africa Live – CGTN Africa

As reported by Africa Live – CGTN Africa. Enjoyed this news story? Read more South Sudan news features on Africa Live – CGTN Africa.

Credits : Africa Live – CGTN Africa (https://africa.cgtn.com) → Author : South Sudan PRESS REVIEW

Publishing and Aggregation by : South Sudan NEWS PORTAL

Permission : Central Press Syndicate South Sudan

S.Sudan NEWS PORTAL:  African Development Bank allots 1.2 million Euros to boost mining revenues

Facebook : South Sudan NEWS PORTAL

We respect the intellectual property rights of our news sources and expect our users to do the same. We may provide links to external news sources from time to time, but any trademarks, logos, photographs and videos remain their copyrighted works. If you feel our website violates fair use or infringes on your copyright, inform us immediately for redress.

The Central Press Syndicate of South Sudan publishes articles related to South Sudan from press wires, verified social media sources and Google news, thereby centralizing South Sudanese news from all over the web, in an easy to read format.

Read related stories with similar tags below:

Be First to Comment

Leave a Reply