BANK OF UGANDA (BoU) MAINTAINS INTEREST RATE AT 9.75%.
In its latest monetary policy announcement on February 6, 2025, Uganda's central bank has decided to maintain its benchmark interest rate at 9.75%. This decision marks a continuation from the previous period, reflecting a steady stance amidst the current economic conditions.
The central bank's decision to maintain the interest rate at 9.75% indicates a focus on stabilizing inflationary pressures while supporting economic growth within the nation.
Analysts had widely anticipated this move given subdued inflation trends and the government's cautious approach to fostering a balanced economic environment.
By not adjusting the interest rate, the central bank signals its assessment that the current level is appropriate for achieving its macroeconomic goals.
As businesses and investors await further developments, this consistent monetary policy approach seeks to provide a stable financial backdrop for economic planning and investment decisions across the country.
The monetary authorities continue to keep a vigilant eye on both domestic and global economic indicators to guide future policy actions.
CENTRAL BANK OF KENYA (CBK) CUTS RATES.
The Central Bank of Kenya (CBK) has lowered its Central Bank Rate (CBR) to 10.75% from 11.25% and reduced the Cash Reserve Ratio (CRR) to 3.25% from 4.25%, aiming to boost liquidity and stimulate economic growth.
The decision, announced by MPC Chairman Dr. Kamau Thugge on February 5, 2025, follows a slowdown in GDP growth to 4.0% in Q3 2024, down from 6.0% in Q3 2023.
Despite the easing, inflation remains within the 5±2.5% target, with core inflation at 2.0% in January 2025.
The banking sector remains stable, with NPLs at 16.4%, while forex reserves stand at $9.066 billion.
Kenya's current account deficit improved to 3.7% of GDP in 2024, driven by strong diaspora remittances (+18.0%) and tourist arrivals (+14.6%), resulting in a balance of payments surplus of $1.466 billion.
CZECH NATIONAL BANK LOWERS INTEREST RATES.
In a strategic move reflecting stabilizing inflation rates, the Czech National Bank announced a reduction in its interest rate from 4.00% to 3.75%. The decision was updated on February 6, 2025, marking a significant shift in the country’s monetary policy stance.
This latest adjustment seeks to balance the emerging signs of economic moderation while ensuring support for domestic economic activities.
By easing the interest rates, the central bank aims to lower borrowing costs for businesses and consumers, thereby stimulating spending and investment without igniting inflationary pressures.
Analysts anticipate that this move will enhance economic growth prospects and contribute to a more balanced recovery phase by encouraging greater financial circulation in the market.
The Czech Republic joins several other European countries in cautiously tweaking monetary policies in response to current economic conditions.
MEXICO'S CENTRAL BANK EASES INTEREST RATES.
In a significant policy shift, Mexico's Central Bank has decided to lower its benchmark interest rate from 10.00% to 9.50%.
The decision, which comes after maintaining rates at a decade-high of 10.00% since December 2024, marks Mexico's ongoing efforts to balance economic growth with moderating inflationary pressures.
The decrease in interest rates could potentially stimulate growth by making borrowing more attractive for businesses and consumers alike.
Analysts had been speculating on such a move following signals from the bank indicating a diminishing necessity for ultra-high rates as inflation pressures showed signs of cooling down.
This monetary policy adjustment indicates that the Mexican economy is on a hopeful trajectory, aiming for a stable environment which fosters investment while keeping an eye on price stability.
The implications for domestic and international investors may be significant, as lower interest rates can lead to enhanced financial conditions, providing the impetus for further economic activity.